xercise 12-11 Indirect: Preparation of statement of cash flows LO P1, P2, P3, A1 [The following information applies to the questions displayed below.] The following financial statements and additional information are reported. IKIBAN INC. Comparative Balance Sheets June 30, 2015 and 2014 2015 2014 Assets Cash $ 106,700 $ 56,200 Accounts receivable, net 69,700 51,000 Inventory 66,700 96,500 Prepaid expenses 4,500 5,600 Total current assets 247,600 209,300 Equipment 124,500 113,000 Accum. depreciationEquipment (28,500 ) (10,400 ) Total assets $ 343,600 $ 311,900 Liabilities and Equity Accounts payable $ 27,000 $ 32,700 Wages payable 7,200 16,400 Income taxes payable 2,300 4,100 Total current liabilities 36,500 53,200 Notes payable (long term) 43,000 71,000 Total liabilities 79,500 124,200 Equity Common stock, $5 par value 239,000 180,000 Retained earnings 25,100 7,700 Total liabilities and equity $ 343,600 $ 311,900 IKIBAN INC. Income Statement For Year Ended June 30, 2015 Sales $ 669,000 Cost of goods sold 409,000 Gross profit 260,000 Operating expenses Depreciation expense $ 58,500 Other expenses 66,900 Total operating expenses 125,400 134,600 Other gains (losses) Gain on sale of equipment 3,000 Income before taxes 137,600 Income taxes expense 55,040 Net income $ 82,560 Additional Information a. A $28,000 note payable is retired at its $28,000 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 $60,400 cash. d. Received cash for the sale of equipment that had cost $48,900, yielding a $3,000 gain. e. Prepaid Expenses and Wages Payable relate to Other Expenses on the income statement. f. All purchases and sales of inventory are on credit. References Section BreakExercise 12-11 Indirect: Preparation of statement of cash flows LO P1, P2, P3, A1 1.value: 26.00 pointsRequired information Exercise 12-11 Part 1 Required: (1) Prepare a statement of cash flows for the year ended June 30, 2015, using the indirect method. (Amounts to be deducted should be indicated with a minus sign.) HintsReferenceseBook & Resources Hint #1 Ask your instructor a questionCheck my work 2.value: 2.00 pointsRequired information Exercise 12-11 Part 2 (2) Compute the company's cash flow on total assets ratio for its fiscal year 2015.