Question

Required information [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, 2019 and 2018 2019 2018 $184,500 72,500 68,888 4,900 250,700 129,880 (29,500) $350,200 $ 49,000 56,000 94,000 6,400 205,400 120,000 (11,500) 5313,900 Assets Cash Accounts receivable, net Inventory Prepaid expenses Total current assets Equipment Accum. depreciation-Equipment Total assets Liabilities and Equity Accounts payable Wages payable Income taxes payable Total current liabilities Notes payable (long term) Total liabilities Equity Common stock, $5 par value Retained earnings Total liabilities and equity $ 30,000 6,500 3,900 40,400 35,000 75,400 $ 37,500 16,000 4,800 58, 30e 65, eee 123,300 230,000 44,800 $350,200 165,000 25,600 $313,900 $703,000 416,eee 287,000 IKIBAN INC. Income Statement For Year Ended June 30, 2019 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense $63,600 other expenses 72,000 Total operating expenses Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net Income 135,600 151,400 153,900 44,390 $109,510 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 $62,600 cash d. Received cash for the sale of equipment that had cost $53,600, yielding a $2,500 gain e. Prepaid Expenses and Wages Payable relate to Other Expenses on the income statement 1. All purchases and sales of inventory are on credit