Exercise 16-11 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	$	100,300			$	56,000
Accounts receivable, net		83,000				63,000
Inventory		75,800				104,500
Prepaid expenses		5,600				7,800
Total current assets		264,700				231,300
Equipment		136,000				127,000
Accum. depreciationEquipment		(33,000	)			(15,000	)
Total assets	$	367,700			$	343,300
Liabilities and Equity
Accounts payable	$	37,000			$	48,000
Wages payable		7,200				17,400
Income taxes payable		4,600				6,200
Total current liabilities		48,800				71,600
Notes payable (long term)		42,000				72,000
Total liabilities		90,800				143,600
Equity
Common stock, $5 par value		244,000				172,000
Retained earnings		32,900				27,700
Total liabilities and equity	$	367,700			$	343,300

IKIBAN INC. Income Statement For Year Ended June 30, 2017
Sales				$	738,000
Cost of goods sold					423,000
Gross profit					315,000
Operating expenses
Depreciation expense	$	70,600
Other expenses		79,000
Total operating expenses					149,600
					165,400
Other gains (losses)
Gain on sale of equipment					3,200
Income before taxes					168,600
Income taxes expense					45,090
Net income				$	123,510

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 $69,600 cash.
4. Received cash for the sale of equipment that had cost $60,600, yielding a $3,200 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.

Exercise 16-11 Part 2

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