Question

Required information [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, 2019 and 2018 2019 2018 Assets $ 94,300 $ 66,000 73,000 119,500 9,800 268,300 137,000 Cash Accounts receivable, net Inventory Prepaid expenses 98,000 85,800 6,600 284,700 146,000 (38,000) Total current assets Equipment Accum. depreciation-Equipment (20,000) $385,300 $392,700 Total assets Liabilities and Equity Accounts payable Wages payable Income taxes payable $ 47,000 8,200 5,600 $ 63,000 19,400 8,200 90,600 82,000 172,600 60,800 52,000 112,800 Total current liabilities Notes payable (long term) Total liabilities Equity Common stock, $5 par value Retained earnings 264,000 15,900 182,000 30,700 Total liabilities and equity $392,700 $385,300

Need help on the numerator & denominator

Answer 1

Cash Flow on Total Assets Ratio
Choose Numerator:	/	Choose Denominator:	=	Cash Flow on Total Assets Ratio
Operating cash flows	/	Average total assets	=	Cash Flow on Total Assets Ratio
202010	/	389000	=	51.9%

Workings:
Cash flows from operating activities
Net income	143510
Adjustments to reconcile net income:
Income statement items not affecting cash
Depreciation expense	80600
Gain on sale of plant assets	-4200
Changes in current operating assets and liabilities
Increase in accounts receivable	-25000
Decrease in inventory	33700
Decrease in prepaid expenses	3200
Decrease in accounts payable	-16000
Decrease in wages payable	-11200
Decrease in income taxes payable	-2600
Net cash provided by operating activities		202010
Average total assets	389000	=(392700+385300)/2