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Exercise 12-11 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 INC. Comparative Balance Sheets June 30, 2019 and 2018
	2019				2018
Assets
Cash	$	93,700			$	67,000
Accounts receivable, net		99,500				74,000
Inventory		86,800				121,000
Prepaid expenses		6,700				10,000
Total current assets		286,700				272,000
Equipment		147,000				138,000
Accum. depreciationEquipment		(38,500	)			(20,500	)
Total assets	$	395,200			$	389,500
Liabilities and Equity
Accounts payable	$	48,000			$	64,500
Wages payable		8,300				19,600
Income taxes payable		5,700				8,400
Total current liabilities		62,000				92,500
Notes payable (long term)		53,000				83,000
Total liabilities		115,000				175,500
Equity
Common stock, $5 par value		266,000				183,000
Retained earnings		14,200				31,000
Total liabilities and equity	$	395,200			$	389,500

IKIBAN INC. Income Statement For Year Ended June 30, 2019
Sales				$	793,000
Cost of goods sold					434,000
Gross profit					359,000
Operating expenses
Depreciation expense	$	81,600
Other expenses		90,000
Total operating expenses					171,600
					187,400
Other gains (losses)
Gain on sale of equipment					4,300
Income before taxes					191,700
Income taxes expense					46,190
Net income				$	145,510

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 $80,600 cash.
4. Received cash for the sale of equipment that had cost $71,600, yielding a $4,300 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 12-11 Part 2

(2) Compute the companys cash flow on total assets ratio for its fiscal year 2019.

Cash Flow on Total Assets Ratio Choose Numerator: 1 Choose Denominator: Cash Flow on Total Assets Ratio 1 Cash flow on total assets ratio 1 0