Exercise $12-19$B $($Algo$)$ Direct: Preparing statement of cash flows LO P$5$

The following financial statements and additional information are reported.

IKIBAN INCORPORATED

Comparative Balance Sheets

At June $3020212020$

Assets

Cash $ $79,100$ $ $58,000$

Accounts receivable, net $86,00065,000$

Inventory $77,800107,500$

Prepaid expenses $5,8008,200$

Total current assets $248,700238,700$

Equipment $138,000129,000$

Accumulated depreciation$$Equipment $(34,000)(16,000)$

Total assets $ $352,700$ $ $351,700$

Liabilities and Equity

Accounts payable $ $39,000$ $ $51,000$

Wages payable $7,40017,800$

Income taxes payable $4,8006,600$

Total current liabilities $51,20075,400$

Notes payable $($long term$)32,80074,000$

Total liabilities $84,000149,400$

Equity

Common stock, $$5$ par value $248,000174,000$

Retained earnings $20,70028,300$

Total liabilities and equity $ $352,700$ $ $351,700$

IKIBAN INCORPORATED

Income Statement

For Year Ended June $30,2021$

Sales $ $748,000$

Cost of goods sold $425,000$

Gross profit $323,000$

Operating expenses $($excluding depreciation$)81,000$

Depreciation expense $72,600$

$169,400$

Other gains $($losses$)$

Gain on sale of equipment $3,400$

Income before taxes $172,800$

Income taxes expense $45,290$

Net income $ $127,510$

Additional Information

A $$41,200$ note payable is retired at its $$41,200$ carrying $($book$)$ value in exchange for cash.

The only changes affecting retained earnings are net income and cash dividends paid.

New equipment is acquired for $$71,600$ cash.

Received cash for the sale of equipment that had cost $$62,600,$ yielding a $$3,400$ gain.

Prepaid Expenses and Wages Payable relate to Operating Expenses on the income statement.

All purchases and sales of inventory are on credit.

Using the direct method, prepare the statement of cash flows for the year ended June $30,2021.$

Note: Amounts to be deducted should be indicated with a minus sign.