Exercise 12-11 Indirect: Preparation of statement of cash flows LO P1, P2, P3, A1 [The following information applies to the questions displayed below.) The following financial statements and additional information are reported. 2014 IKIBAN INC. Comparative Balance Sheets June 30, 2015 and 2014 2015 Assets Cash $ 107,400 Accounts receivable, net 69,700 Inventory 66,200 Prepaid expenses 4,600 $ 57,100 51,700 96,700 5,500 Total current assets Equipment Accum. depreciation- Equipment 247,900 129,600 (28,800) 211,000 118,000 (10,100) Total assets $ 348,700 $318,900 Liabilities and Equity Accounts payable Wages payable Income taxes payable $ 26,300 7,600 2.600 $ 32,300 16,600 3.600 Additional Information A $23,000 note payable is retired at its $23,000 carrying (book) value in exchange for cash. The only changes affecting retained earnings are net income and cash dividends paid. c. New equipment is acquired for $61,000 cash. Received cash for the sale of equipment that had cost $49,400, yielding a $2,200 gain. Prepaid Expenses and Wages Payable relate to Other Expenses on the income e statement. f. All purchases and sales of inventory are on credit. of 2 ook -int Exercise 12-11 Part 2 rences (2) Compute the company's cash flow on total assets ratio for its fiscal year 2015. Cash Flow on Total Assets Ratio Choose Numerator: Choose Denominator: = Cash Flow on Total Assets Ratio Operating cash flows 1 Average total assets = Cash flow on total assets ratio 138,120 11 Liabilities and Equity Accounts payable Wages payable Income taxes payable $ 26,300 7,600 2,600 $ 32,300 16,600 3,600 Total current liabilities Notes payable (long term) 36,500 48,000 52,500 71,000 84,500 123,500 Total liabilities Equity Common stock, $5 par value Retained earnings 239,000 25,200 187,000 8,400 Total liabilities and equity $348,700 $318,900 IKIBAN INC. Income Statement For Year Ended June 30, 2015 Sales $ 672,000 Cost of goods sold 408,000 264,000 Gross profit IKIBAN INC. Income Statement For Year Ended June 30, 2015 Sales $ 672,000 408,000 Cost of goods sold of 2 264,000 Gross profit Operating expenses Depreciation expense $57,600 Other expenses 66,400 bok Total operating expenses 124,000 ences 140,000 Other gains (losses) Gain on sale of equipment 2,200 Income before taxes Income taxes expense 142,200 56,880 Net income $ 85,320