Selected financial information for Frank Corporation is presented below. Selected transactions for the current year are as follows: a. Purchased investment securities for $6,300 cash. b. Borrowed $17,600 on a two-year, 8 percent interest-bearing note. c. During the year, sold machinery for its carrying amount; received $12,950 in cash. d. Purchased machinery for $52,600; paid $10,300 in cash and signed a four-year note payable to the dealer for $42,300. e. Declared and paid a cash dividend of $11,300 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 Prior Year Year Cash Accounts receivable Inventory Accounts payable Accrued wages payable Income tax payable $85,100 $22,300 18,300 12,650 53,300 62,600 8,300 12,600 1,450 2,300 6,300 3,650 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 $426,000 Cost of sales 281,000 Gross profit 145,000 Expenses Salaries and wages $52,300 Depreciation 10,500 Rent (no accruals) 7,100 Interest (no accruals) 13,500 Income tax 13,100 Total expenses 96,500 Net earnings $ 48,500 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.) FRANK CORPORATION Statement of Cash Flows For the Year Ended December 31 Current Year Cash flows from operating activities: Net earnings Add (deduct) items not affecting cash: Net cash flows from operating activities Cash flows from investing activities: Net cash flows used in investing activities Cash flows from financing activities: Net cash flows from financing activities Cash, beginning of the year Cash, end of the year 2. This part of the question is not part of your Connect assignment. 3. 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