Required information Exercise 12-12 (Algo) 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 INCORPORATED Comparative Balance Sheets At June 30 2021 2020 Assets Cash Accounts receivable, net Prepaid expenses $ 99,700 $ 57,000 84,500 Inventory Total current assets Equipment Accumulated depreciation-Equipment Total assets Liabilities and Equity Accounts payable Wages payable Income taxes payable Total current liabilities Notes payable (long term) Total liabilities Equity Common stock, $5 par value 76,800 64,000 106,000 5,700 8,000 266,700 235,000 137,000 (33,500) $ 370,200 $ 38,000 7,300 4,700 128,000 (15,500) $ 347,500 $ 49,500 17,600 6,400 50,000 73,500 43,000 73,000 93,000 146,500 246,000 173,000 Retained earnings Total liabilities and equity 31,200 $ 370,200 28,000 $ 347,500 Sales IKIBAN INCORPORATED Income Statement For Year Ended June 30, 2021 Cost of goods sold Gross profit Operating expenses (excluding depreciation) Depreciation expense Other gains (losses). Gain on sale of equipment Income before taxes Income taxes expense Net income Additional Information $ 743,000 424,000 319,000 80,000 71,600 167,400 3,300 170,700 45,190 $ 125,510 a. A $30,000 notes 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 $70,600 cash. d. Received cash for the sale of equipment that had cost $61,600, yielding a $3,300 gain. e. Prepaid Expenses and Wages Payable relate to Operating Expenses on the income statement. f. All purchases and sales of inventory are on credit. (1) Prepare a statement of cash flows using the indirect method for the year ended June 30, 2021. Note: Amounts to be deducted should be indicated with a minus sign. Cash flows from operating activities Net income IKIBAN, INCORPORATED Statement of Cash Flows (Indirect Method) For Year Ended June 30, 2021 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 FA $ 0 Cash flows from investing activities Cash flows from financing activities Net increase (decrease) in cash Cash balance at prior year-end Cash balance at current year-end 0 0 0 69 $ 0 Additional Information a. A $30,000 notes 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 $70,600 cash. d. Received cash for the sale of equipment that had cost $61,600, yielding a $3,300 gain. e. Prepaid Expenses and Wages Payable relate to Operating Expenses on the income statement. f. All purchases and sales of inventory are on credit. Exercise 12-12 (Algo) Part 2 (2) Compute the company's cash flow on total assets ratio for its fiscal year 2021. Choose Numerator: Operating cash flows Cash Flow on Total Assets Ratio Choose Denominator: = Average total assets = = Cash Flow on Total Assets Ratio Cash flow on total assets ratio 0