[The following information applies to the questions displayed below The following financial statements and additional information are reported. IKIBAN INC. Comparative Balance Sheets June 30, 2017 and 2016 2017 2016 Assets Cash $ 53,000 $102,100 78,500 72,800 5,300 258,700 133,000 (31,500) Accounts receivable, net Inventory Prepaid expenses 60,000 100,000 7,200 220,200 124,000 (13,500) Total current assets Equipment Accum. depreciation-Equipment $330,700 Total assets $360,200 Liabilities and Equity Accounts payable Wages payable Income taxes payable Total current liabilities $34,000 6,900 4,300 45,200 39,000 84,200 43,500 16,800 5,600 65,900 69,000 134,900 Notes payable (long term) Total liabilities Equity Common stock, $5 par value Retained earnings 238,000 38,000 169,000 26,800 $330,700 Total liabilities and equity $360,200 IKIBAN INC Income Statement For Year Ended June 30, 2017 Sales $723,000 420,000 303,000 Cost of qoods sold Gross profit Operating expenses Depreciation expense $67,600 76,000 Other expenses Total operating expenses 143,600 159,400 Other gains (losses) Gain on sale of equipment 2,900 162,300 44,790 Income before taxes Income taxes expense $117,510 Net income IKIBAN, INC. Statement of Cash Flows (Direct Method) For Year Ended June 30, 2017 Cash flows from operating activities Cash flows from investing activities Cash flows from financing activities Net increase (decrease) in cash Cash balance at prior year-end Cash balance at current year-end Additional Information
a. A $30,000 note payable is retired at its $30,000 carrying (book) value in exchange for cash.
b. The only changes affecting retained earnings are net income and cash dividends paid.
c. New equipment is acquired for $66,600 cash.
d. Received cash for the sale of equipment that had cost $57,600, yielding a $2,900 gain.
e. Prepaid Expenses and Wages Payable relate to Other Expenses on the income statement.
f. All purchases and sales of inventory are on credit.