Selected financial information for Frank Corporation is presented below. Selected 2017 transactions are as follows: a. Purchased investment securities for $5,000 cash. b. Borrowed $15,000 on a two-year, 8 percent interest-bearing note. c. During 2017, sold machinery for its carrying amount; received $11,000 in cash. d. Purchased machinery for $50,000; paid $9,000 in cash and signed a four-year note payable to the dealer for $41,000. e. Declared and paid a cash dividend of $10,000 on December 31, 2017. Selected account balances at December 31, 2016 and 2017, are as follows: December 31 Cash Accounts receivable Inventory Accounts payable Accrued wages payable Income taxes payable 2017 $ 76,000 17,000 52,000 7,000 800 5,000 2016 $ 21,000 12,000 60,000 10,000 1,000 3,000 One-fourth of the sales and one-third of the purchases were made on credit. FRANK CORPORATION Statement of Earnings For the Year Ended December 31, 2017 Sales revenue $ 400,000 Cost of sales 268,000 132,000 Gross profit Expenses Salaries and wages Depreciation Rent (no accruals) Interest (no accruals) Income tax $ 51,000 9,200 5,800 12,200 11,800 Total expenses 90,000 Net earnings $ 42,000 Required: 1. Prepare a statement of cash flows for the year ended December 31, 2017 by using the indirect method. (Negative answers should be indicated by a minus sign.) 2. Compute the quality of earnings ratio and the capital expenditures ratio. (Enter your answers in numbers and not in percentages. Round the final answers to 2 decimal places.) Quality of earnings ratio Capital expenditures ratio