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Exercise $12-12($Algo$)$ Indirect: Preparing statement of cash flows LO P$2,$ P$3,$ A$1$

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$[$The following information applies to the questions displayed below.$]$

The following financial statements and additional information are reported.

IKIBAN INCORPORATED

Comparative Balance Sheets

At June $3020212020$

Assets

Cash $ $100,900$ $ $55,000$

Accounts receivable, net $81,50062,000$

Inventory $74,800103,000$

Prepaid expenses $5,5007,600$

Total current assets $262,700227,600$

Equipment $135,000126,000$

Accumulated depreciation$$Equipment $(32,500)(14,500)$

Total assets $ $365,200$ $ $339,100$

Liabilities and Equity

Accounts payable $ $36,000$ $ $46,500$

Wages payable $7,10017,200$

Income taxes payable $4,5006,000$

Total current liabilities $47,60069,700$

Notes payable $($long term$)41,00071,000$

Total liabilities $88,600140,700$

Equity

Common stock, $$5$ par value $242,000171,000$

Retained earnings $34,60027,400$

Total liabilities and equity $ $365,200$ $ $339,100$

IKIBAN INCORPORATED

Income Statement

For Year Ended June $30,2021$

Sales $ $733,000$

Cost of goods sold $422,000$

Gross profit $311,000$

Operating expenses $($excluding depreciation$)78,000$

Depreciation expense $69,600$

$163,400$

Other gains $($losses$)$

Gain on sale of equipment $3,100$

Income before taxes $166,500$

Income taxes expense $44,990$

Net income $ $121,510$

Additional Information

A $$30,000$ notes payable is retired at its $$30,000$ 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 $$68,600$ cash.

Received cash for the sale of equipment that had cost $$59,600,$ yielding a $$3,100$ gain.

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

All purchases and sales of inventory are on credit.

Exercise $12-12($Algo$)$ Part $1$

Required:

$(1)$ Prepare a statement of cash flows using the indirect method for the year ended June $30,2021.$

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