Selected financial information for Frank Corporation is presented below.

Selected transactions for the current year are as follows:

Purchased investment securities for $$5,900$ cash.

Borrowed $$16,800$ on a two$-$year, $8$ percent interest$-$bearing note.

During the year, sold machinery for its carrying amount; received $$12,350$ in cash.

Purchased machinery for $$51,800$; paid $$9,900$ in cash and signed a four$-$year note payable to the dealer for $$41,900.$

Declared and paid a cash dividend of $$10,900$ on December $31$ of the current year.

Selected account balances at December $31$ of the current and prior years are as follows:

December $31$

Current Year Prior Year

Cash $ $82,300$ $ $21,900$

Accounts receivable $17,90012,450$

Inventory $52,90061,800$

Accounts payable $7,90011,800$

Accrued wages payable $1,2501,900$

Income tax payable $5,9003,450$

One$-$fourth of the sales and one$-$third of the purchases were made on credit.

FRANK CORPORATION

Statement of Earnings

For the Current Year Ended December $31$

Sales revenue $ $418,000$

Cost of sales $277,000$

Gross profit $141,000$

Expenses

Salaries and wages $ $51,900$

Depreciation $10,100$

Rent $($no accruals$)6,700$

Interest $($no accruals$)13,100$

Income tax $12,700$

Total expenses $94,500$

Net earnings $ $46,500$

Required:

$1.$ Prepare a statement of cash flows for the year ended December $31$ of the current year 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.$)$