The followingfinancial statements and additional information are reported. IKIBAN INC.Comparative Balance SheetsJune 30, 2013 and 201220132012 Assets Cash$113,400$69,800 Accountsreceivable, net69,60051,300 Inventory66,60096,000 Prepaidexpenses5,6004,700 Equipment123,100112,000 Accum.depreciation—Equipment(28,100)(10,400) Totalassets$350,200$323,400 Liabilitiesand Equity Accountspayable$26,900$32,200 Wagespayable7,90016,300 Incometaxes payable2,8003,700 Notespayable (long term)48,00074,000 Commonstock, $5 par value239,000189,000 Retainedearnings25,6008,200 Totalliabilities and equity$350,200$323,400 IKIBAN INC.Income StatementFor Year Ended June 30, 2013 Sales$678,000 Cost ofgoods sold409,000 Grossprofit269,000 Operatingexpenses Depreciationexpense$58,400 Otherexpenses66,900 Totaloperating expenses125,300 143,700 Othergains (losses) Gainon sale of equipment2,900 Incomebefore taxes146,600 Incometaxes expense58,640 Net income$87,960 Additional Informationa.A $26,000 note payableis retired at its $26,000 carrying (book) value in exchange for cash.b.The only changesaffecting retained earnings are net income and cash dividends paid.c.New equipment isacquired for $60,000 cash.d.Received cash for thesale of equipment that had cost $48,900, yielding a $2,900 gain.e.Prepaid Expenses andWages Payable relate to Other Expenses on the income statement.f.All purchases andsales of merchandise inventory are on credit.
