The following financial statements and additional information are reported. IKIBAN INCORPORATED Comparative Balance Sheets At June 30 2021 2020 Assets Cash $ 106,900 $ 45,000 Accounts receivable, net 66,500 52,000 Inventory 64,800 88,000 Prepaid expenses 4,500 5,600 Total current assets 242,700 190,600 Equipment 125,000 116,000 Accumulated depreciation—Equipment (27,500) (9,500) Total assets $ 340,200 $ 297,100 Liabilities and Equity Accounts payable $ 26,000 $ 31,500 Wages payable 6,100 15,200 Income taxes payable 3,500 4,000 Total current liabilities 35,600 50,700 Notes payable (long term) 31,000 61,000 Total liabilities 66,600 111,700 Equity Common stock, $5 par value 222,000 161,000 Retained earnings 51,600 24,400 Total liabilities and equity $ 340,200 $ 297,100 IKIBAN INCORPORATED Income Statement For Year Ended June 30, 2021 Sales $ 683,000 Cost of goods sold 412,000 Gross profit 271,000 Operating expenses (excluding depreciation) 68,000 Depreciation expense 59,600 143,400 Other gains (losses) Gain on sale of equipment 2,100 Income before taxes 145,500 Income taxes expense 43,990 Net income $ 101,510 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 $58,600 cash. Received cash for the sale of equipment that had cost $49,600, yielding a $2,100 gain. Prepaid Expenses and Wages Payable relate to Operating Expenses on the income statement. All purchases and sales of inventory are on credit.