Exercise 12-11 Indirect: Preparing 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.

IKIBAN INC. Comparative Balance Sheets June 30, 2017 and 2016
	2017				2016
Assets
Cash	$	106,300			$	46,000
Accounts receivable, net		68,000				53,000
Inventory		65,800				89,500
Prepaid expenses		4,600				5,800
Total current assets		244,700				194,300
Equipment		126,000				117,000
Accum. depreciationEquipment		(28,000	)			(10,000	)
Total assets	$	342,700			$	301,300
Liabilities and Equity
Accounts payable	$	27,000			$	33,000
Wages payable		6,200				15,400
Income taxes payable		3,600				4,200
Total current liabilities		36,800				52,600
Notes payable (long term)		32,000				62,000
Total liabilities		68,800				114,600
Equity
Common stock, $5 par value		224,000				162,000
Retained earnings		49,900				24,700
Total liabilities and equity	$	342,700			$	301,300

IKIBAN INC. Income Statement For Year Ended June 30, 2017
Sales				$	688,000
Cost of goods sold					413,000
Gross profit					275,000
Operating expenses
Depreciation expense	$	60,600
Other expenses		69,000
Total operating expenses					129,600
					145,400
Other gains (losses)
Gain on sale of equipment					2,200
Income before taxes					147,600
Income taxes expense					44,090
Net income				$	103,510

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 $59,600 cash.
4. Received cash for the sale of equipment that had cost $50,600, yielding a $2,200 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: 12_05_2017_QC_CS-111198

Exercise 12-11 Part 2

(2) Compute the company's cash flow on total assets ratio for its fiscal year 2017.