$\backslash$table$[[$IKIBAN INCORPORATED$],[$At June $30,2021,2020],[$Assets$],[,$$$101,500,$$$54,000],[$Accounts receivable, net,$\backslash$table$[[80,000],[80,600]],61,000],[$Inventory$,\backslash$table$[[00,600],[73,800]],101,500],[$Prepaid expenses,$\backslash$table$[[5,000],[5,400]],\backslash$table$[[10,300],[7,400]]],[$Total current assets,$260,700,223,900],[$Equipment$,\backslash$table$[[200,000],[134,000]],125,000],[$Accumulated depreciation$-$Equipment,$(32,000),(14,000)],[$Total assets,$$362,700,$$$334,900],[$Liabilities and Eql$],[,$$$35,000,$$$45,000],[$Wages F$,7,000,17,000],[$Income taxe:,,$\backslash$table$[[5,800]]],[$Total current liabilities,$46,400,67,800],[$Notes payable $($long term$),40,000,70,000],[,,],[,,],[$Retained earnings,$240,000,170,000],[,],[$Total liabilities and equity,$$362,700,$$$334,900],[,,],[\{$

$\backslash$table$[[$Sales$],[$Cost of goods sold$],[$Gross profit$],[$Operating expenses $($excluding depreciation$)],[$Depreciation expense$]]\},],[421,000],[307,000],[77,000],[68,600],[$Other gains $($losses$),],[],[\{$

$\backslash$table$[[$Gain on sale of equipment$],[$Income before taxes$],[$Income taxes expense$]]\},(3,000)/(164\mathrm{.}409)],[\backslash$table$[[104,890],[44,890]]],[$Net income,$$119,510]]$

Additional Information

a$.$ A $$30,000$ notes payable is retired at its $$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 $$67,600$ cash.

d$.$ Received cash for the sale of equipment that had cost $$58,600,$ yielding a $$3,000$ gain.

e$.$ Prepaid Expenses and Wages Payable relate to Operating Expenses on the income statement. f$.$ 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 $30,2021.($Amounts to be deducted be indicated with a minus sign.$)$

$$ Answer is complete but not entirely correct.

$\backslash$table$[[$IKIBAN$,$ INCORPORATED$],[$Statement of Cash Flows $($Indirect Method$)],[$For Year Ended June $30,2021],[$Cash flows from operating activities$],[$Net income,$0,$$$119,5100,,],[$Adjustments to reconcile net income to net cash provided by operating activities$],[$Income statement items not affecting cash$],[$Depreciation expense,$0,68,600,,],[$Gain on sale of plant assets,$0,(3,000),,],[$Changes in current operating assets and liabilities$],[$Increase in accounts receivable,$0,(19,000),,],[$Decrease in inventory,$0,27,7000,,],[$Decrease in prepaid expenses,$0,2,0000,,],[$Decrease in accounts payable,$0,(10,000),,],[$Decrease in wages payable,$0,(10,000),,],[$Decrease in income taxes payable,$0,(1,400),,],[$Net cash provided by operating activities,$0,,$$$,174,410],[$Cash flows from investing activities$],[$Cash received from sale of equipment,$0,10,800$ox$,,],[$Cash paid for equipment,$0,(67,600),,],[$Net cash used in investing activities,$0,,,(56,800)],[$Cash flows from financing activities$],[$Cash paid to retire notes,$0,(30,000),,],[$Cash paid for dividends,$0,(110,310),,],[$Cash received from stock issuance,$0,70,0000,,],[$Net cash used in financing activities,$0,,,(70,310)],[$Net increase $($decrease$)$ in cash,,,$$,47,300],[$Cash balance at prior year$-$end,,,,$54,000],[$Cash balance at current year$-$end,,,$$,101,300]]$