Exercise 12-11 Indirect: Preparing statement of cash flows LO 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, 2019 and 2018 2019 2018 Assets Cash $103,900 $ 50,000 Accounts receivable, net 74,000 57,000 Inventory 69,800 95,500 Prepaid expenses 5.000 6,600 Total current assets 252,700 209,100 Equipment 130,000 121,000 Accum. depreciation-Equipment (30,000) (12,000) Total assets $352, 700 $318,100 Liabilities and Equity Accounts payable $ 31,000 $ 39,000 Wages payable 6,600 16,200 Income taxes payable 4,000 5,000 Total current liabilities 141,600 60,200 Notes payable (long term) 36,000 66.000 Total liabilities 77,600 126,200 Equity Common stock, $5 par value 232,000 166,000 Retained earnings 43, 100 25,900 Total liabilities and equity $352, 700 $318,100 $708,000 417,000 2910,000 IKIBAN INC. Income Statement For Year Ended June 30, 2019 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense $64,600 Other expenses 73,000 Total operating expenses Other gains (lonnes) Gain on sale of equipment Income before taxes Income taxes expense Net income 137,600 153,400 2.600 156,000 44,490 $111,510 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 equipment is acquired for $63,600 cash d. Received cash for the sale of equipment that had cost $54,600. yielding a $2,600 gain. e. Prepaid Expenses and Wages Payable relate to Other Expenses on the income statement f. All purchases and sales of inventory are on credit Required: (1) Prepare a statement of cash flows using the Indirect method for the year ended June 30, 2019. (Amounts to be deducted should be indicated with a minus sign.) IKIBAN, INC. Statement of Cash Flows (Indirect Method) For Year Ended June 30, 2019 Cash flows from operating activities Adjustments to reconcile net income to net cash provided by operating activities Income statement items not affecting cash Changes in current operating assets and liabilities Cash flows from investing activities Cash flows from financing activities 0 $ 0 Net increase (decrease) in cash Cash balance at prior year-end Cash balance of current year-end $ 0 Exercise 12-11 Part 2 (2) Compute the company's cash flow on total assets ratio for its fiscal year 2019. Choose Numerator Cash Flow on Total Assets Ratio Choose Denominator: = Cash Flow on Total Assets Ratie+ Cash flow on total assets ratio 1 1 0