Required information [The following information applies to the questions displayed below.] The following financial statements and additional...

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, 2017 and 2016 2017  2016  Assets        Cash$96,100  $63,000  Accounts receivable, net 93,500   70,000  Inventory 82,800   115,000  Prepaid expenses 6,300   9,200  Total current assets 278,700   257,200  Equipment 143,000   134,000  Accum. depreciation—Equipment (36,500)  (18,500) Total assets$385,200  $372,700  Liabilities and Equity        Accounts payable$44,000  $58,500  Wages payable 7,900   18,800  Income taxes payable 5,300   7,600  Total current liabilities 57,200   84,900  Notes payable (long term) 49,000   79,000  Total liabilities 106,200   163,900  Equity        Common stock, $5 par value 258,000   179,000  Retained earnings 21,000   29,800  Total liabilities and equity$385,200  $372,700  

IKIBAN INC.

Income Statement

For Year Ended June 30, 2017Sales   $773,000 Cost of goods sold    430,000 Gross profit    343,000 Operating expenses      Depreciation expense$77,600    Other expenses 86,000    Total operating expenses    163,600      179,400 Other gains (losses)      Gain on sale of equipment    3,900 Income before taxes    183,300 Income taxes expense    45,790 Net income   $137,510 

Additional Information

1. A $30,000 note payable is retired at its $30,000 carrying (book) value in exchange for cash.
2. The only changes affecting retained earnings are net income and cash dividends paid.
3. New equipment is acquired for $76,600 cash.
4. Received cash for the sale of equipment that had cost $67,600, yielding a $3,900 gain.
5. Prepaid Expenses and Wages Payable relate to Other Expenses on the income statement.
6. All purchases and sales of inventory are on credit.

rev: 06_20_2017_QC_CS-91585, 12_05_2017_QC_CS-111198