\begin{tabular}{|c|c|c|} \hline ComparativeBalanceAtDecember31 & SheetsYear2 & Year 1 \\ \hline \multicolumn{3}{|l|}{ Assets } \\ \hline Cash & $102,700 & $52,090 \\ \hline Accounts receivable, net & 77,090 & 59,090 \\ \hline Inventory & 71,800 & 98,500 \\ \hline Prepaid expenses & 5,200 & 7,000 \\ \hline Total current assets & 256,700 & 216,500 \\ \hline Machinery & 132,009 & 123,090 \\ \hline Accumulated depreciation-Machinery & (31,000) & (13,090) \\ \hline Total assets & $357,700 & $326,500 \\ \hline \multicolumn{3}{|l|}{ Liabilities } \\ \hline Accounts payable & $33,000 & $42,090 \\ \hline Salaries payable & 6,800 & 16,690 \\ \hline Income taxes payable & 4,200 & 5,400 \\ \hline Total current liabilities & 44,609 & 64,000 \\ \hline Notes payable (long term) & 38,090 & 68,690 \\ \hline Total liabilities & 82,600 & 132,600 \\ \hline \multicolumn{3}{|l|}{ Equity } \\ \hline Common stock, no par value & 236,090 & 168,090 \\ \hline Retained earnings & 39,700 & 26,500 \\ \hline Total liabilities and equity & $357,700 & $326,500 \\ \hline \end{tabular} \begin{tabular}{|c|c|} \hline IncomeStatementForYearEndedDecember31,Year2 & \\ \hline & $718,000 \\ \hline Cost of goods sold & 419,000 \\ \hline Gross profit & 299,000 \\ \hline Operating expenses (excluding depreciation) & 75,090 \\ \hline Depreciation expense & 66,600 \\ \hline & 157,400 \\ \hline Other gains (losses) & \\ \hline Gain on sale of machinery & 2,800 \\ \hline Income before taxes & 16,200 \\ \hline Income taxes expense & 44,690 \\ \hline Net income & $115,510 \\ \hline \end{tabular} 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 machinery is acquired for $65,600 cash. d. Received cash for the sale of machinery that had cost $56,600, yielding a $2,800 gain. e. Prepaid Expenses and Salaries Payable relate to Operating Expenses on the income statement. f. All purchases and sales of inventory are on credit. (2) Compute the company's cash flow on total assets ratio for Year 2