Use the following financial statements and additional information to (1) prepare a statement of cash flows for the year ended December 31, 2017 using the indirect method (2) compute the company's cash flow on total assets ratio for 2017 Derby Company Balance Sheets At December 31 2017 2016 $492,000 Assets: Cash Accounts receivable, net Merchandise inventory Prepaid expenses Equipment Accumulated depreciation-Equipment Total assets $69,800 69,650 159,645 9,660 265,600 (85.600) $488.755 $56,400 56,750 154,850 13,680 245,600 (97.600) $429.680 Derby Company Income Statement For Year Ended December 31, 2017 Sales Cost of goods sold $232,540 Depreciation expense 48.000 Other operating expenses 108,280 Interest expense 6,500 Net operating income Other gains (losses): Gain on sale of equipment Income before taxes 395.320 96,680 7,200 103,880 35.355 68.525 Income taxes expense Net income $ $39,640 17,400| 50.000 $107.040 $45,450 12,240 75.000 $132.690 Liabilities: Accounts payable Income taxes payable Notes payable (long term) Total liabilities Equity: Common stock Paid-in capital in excess of par Retained earnings Total equity Total liabilities and equity 200,000 48,000 150,000 40,000 106.990 $296.990 133.715 $381.715 $488.755 $429.680 a. A $25,000 note payable is retired at its carrying 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 $120,000 cash. d. Received cash for the sale of equipment that had cost $100,000, yielding a gain of $7,200. e. Prepaid expenses relate to Other Expenses on the income statement. f. All purchases and sales of merchandise inventory are on credit. (1) Derby Company Statement of Cash Flows (Indirect Method) For Year Ended December 31, 2017 (2)