Exercise 12-12 (Algo) Indirect: Preparing statement of cash flows LO P2, P3, A1

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[The following information applies to the questions displayed below.] The following financial statements and additional information are reported.

IKIBAN INCORPORATED
Comparative Balance Sheets
At June 30	2021	2020
Assets
Cash	$ 96,700	$ 62,000
Accounts receivable, net	92,000	69,000
Inventory	81,800	113,500
Prepaid expenses	6,200	9,000
Total current assets	276,700	253,500
Equipment	142,000	133,000
Accumulated depreciationEquipment	(36,000)	(18,000)
Total assets	$ 382,700	$ 368,500
Liabilities and Equity
Accounts payable	$ 43,000	$ 57,000
Wages payable	7,800	18,600
Income taxes payable	5,200	7,400
Total current liabilities	56,000	83,000
Notes payable (long term)	48,000	78,000
Total liabilities	104,000	161,000
Equity
Common stock, $5 par value	256,000	178,000
Retained earnings	22,700	29,500
Total liabilities and equity	$ 382,700	$ 368,500

IKIBAN INCORPORATED
Income Statement
For Year Ended June 30, 2021
Sales	$ 768,000
Cost of goods sold	429,000
Gross profit	339,000
Operating expenses (excluding depreciation)	85,000
Depreciation expense	76,600
	177,400
Other gains (losses)
Gain on sale of equipment	3,800
Income before taxes	181,200
Income taxes expense	45,690
Net income	$ 135,510

Additional Information

1. A $30,000 notes 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 $75,600 cash.
4. Received cash for the sale of equipment that had cost $66,600, yielding a $3,800 gain.
5. Prepaid Expenses and Wages Payable relate to Operating Expenses on the income statement.
6. All purchases and sales of inventory are on credit.

(2) Compute the companys cash flow on total assets ratio for its fiscal year 2021.