2. Use the following financial statements and additional information to (1) prepare a statement of cash flows for the year ended December 31, 2013 using the indirect method, and (2) compute the company's cash flow on total assets ratio for 2013. Wescott Company Balance Sheets At December 31 2013 2012 Assets Cash Accounts receivable net Merchandise inventory Prepaid expenses Equipment Accumulated depreciation-Equipment Total assets $ 85,600 $ 65,200 72,850 56,750 157,750 144,850 6,080 12,680 280,600 245, 600 (80.600) (97.600) $522.280 $4272480 Liabilities Accounts payable Income taxes payable Notes payable (long tem) Total liabilities Equity $ 52,850 $ 45,450 15,240 12,240 59,200 179.200 $127.290 $136,890 Common stock Paid-in capital in excess of par Retained eaming 200,000 53,000 11990 150,000 40,000 Total equity Total liabilities and equity $394.990 $522 280 100.590 $29.04590 5427.480 Wescott Company Income Statement For Year Ended December 31, 2013 Sales $488,000 Cost of goods sold $212,540 Depreciation expense 43,000 Other operating expenses 106,260 Interest expense 6.400 (368,200) Other gains (losses) Gain on sale of equipment 14.700 Income before taxes 124,500 Income taxes expense 41100 Net income $183400 Additional Information a. A $20,000 note payable is retired at its carrying 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 $120,000 cash d. Received cash for the sale of equipment that had cost $85,000, yielding a gain of $4,700. e. Prepaid expenses relate to Other Expenses on the income statement f. All purchases and sales of merchandise inventory are on credit