Question

In: Accounting

Blossom Inc., a greeting card company, had the following statements prepared as of December 31, 2020....

Blossom Inc., a greeting card company, had the following statements prepared as of December 31, 2020.

BLOSSOM INC.
COMPARATIVE BALANCE SHEET
AS OF DECEMBER 31, 2020 AND 2019

12/31/20

12/31/19

Cash

$6,000

$6,900

Accounts receivable

61,800

50,900

Short-term debt investments (available-for-sale)

35,200

17,900

Inventory

40,300

60,600

Prepaid rent

5,100

3,900

Equipment

155,100

131,300

Accumulated depreciation—equipment

(35,200

)

(24,800

)

Copyrights

45,800

50,400

Total assets

$314,100

$297,100

Accounts payable

$45,600

$40,000

Income taxes payable

4,000

6,000

Salaries and wages payable

8,100

4,000

Short-term loans payable

7,900

10,000

Long-term loans payable

60,500

68,900

Common stock, $10 par

100,000

100,000

Contributed capital, common stock

30,000

30,000

Retained earnings

58,000

38,200

Total liabilities & stockholders’ equity

$314,100

$297,100

BLOSSOM INC.
INCOME STATEMENT
FOR THE YEAR ENDING DECEMBER 31, 2020

Sales revenue

$336,275

Cost of goods sold

173,300

Gross profit

162,975

Operating expenses

121,200

Operating income

41,775

Interest expense

$11,400

Gain on sale of equipment

2,000

9,400

Income before tax

32,375

Income tax expense

6,475

Net income

$25,900


Additional information:

1. Dividends in the amount of $6,100 were declared and paid during 2020.
2. Depreciation expense and amortization expense are included in operating expenses.
3. No unrealized gains or losses have occurred on the investments during the year.
4. Equipment that had a cost of $19,900 and was 70% depreciated was sold during 2020.


Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

Solutions

Expert Solution

BLOSSOM INC.
Statement of Cash Flows
For the Year Ended December 31 2019
Cash flows from operating activities:
Net Income $     25,900.00
Adjustments to reconcile net income to net cash flow from operating activities:
Depreciation (35200 - (24800 - 19900 x 70%) $     24,330.00
Amotization Expenses of Copyrights $       4,600.00
Gain on sale of equipment $     (2,000.00)
Increase in Accounts Receivable $   (10,900.00)
Decrease in Inventory $     20,300.00
increase in prepaid rent $     (1,200.00)
Inecrease in Accounts Payable   $5,600
Decrease in Income Tax Payable ($2,000)
Increase in Salaries and Wages Payabl $4,100
Net cash provided by operating activities $        68,730.00
Cash flows from  investing activities:
Sale of eqipment (19900 x (1-70%) + 2000 $       7,970.00
Purchases of equipment (155,100 – (131,300 – 19,900)] $   (43,700.00)
Purchase of available for sale investment $   (17,300.00)
Net cash used by investing activities $       (53,030.00)
Cash Flows from Financing Activities:
Principal payment on short-term loan $     (2,100.00)
Principal payment on long-term loan $     (8,400.00)
Dividend payments $     (6,100.00)
Net cash used by financing activities $       (16,600.00)
Net decrease in cash $            (900.00)
Cash, January 1, 2019 $6,900
Cash, December 31, 2019 $          6,000.00

Related Solutions

Wildhorse Inc., a greeting card company, had the following statements prepared as of December 31, 2020....
Wildhorse Inc., a greeting card company, had the following statements prepared as of December 31, 2020. WILDHORSE INC. COMPARATIVE BALANCE SHEET AS OF DECEMBER 31, 2020 AND 2019 12/31/20 12/31/19 Cash $6,100 $6,900 Accounts receivable 61,900 50,600 Short-term debt investments (available-for-sale) 34,700 18,100 Inventory 40,000 59,400 Prepaid rent 5,000 4,000 Equipment 152,800 128,900 Accumulated depreciation—equipment (34,900 ) (25,100 ) Copyrights 46,100 50,400 Total assets $311,700 $293,200 Accounts payable $45,800 $40,100 Income taxes payable 3,900 6,000 Salaries and wages payable 8,100...
Buffalo Inc., a greeting card company, had the following statements prepared as of December 31, 2020....
Buffalo Inc., a greeting card company, had the following statements prepared as of December 31, 2020. BUFFALO INC. COMPARATIVE BALANCE SHEET AS OF DECEMBER 31, 2020 AND 2019 12/31/20 12/31/19 Cash $5,900 $7,000 Accounts receivable 61,500 51,300 Short-term debt investments (available-for-sale) 35,000 17,800 Inventory 40,400 60,200 Prepaid rent 5,000 4,000 Equipment 153,400 129,000 Accumulated depreciation—equipment (35,100 ) (25,100 ) Copyrights 46,300 49,600 Total assets $312,400 $293,800 Accounts payable $46,500 $40,200 Income taxes payable 4,100 6,000 Salaries and wages payable 8,100...
Headland Inc., a greeting card company, had the following statements prepared as of December 31, 2020....
Headland Inc., a greeting card company, had the following statements prepared as of December 31, 2020. HEADLAND INC. COMPARATIVE BALANCE SHEET AS OF DECEMBER 31, 2020 AND 2019 12/31/20 12/31/19 Cash $6,100 $6,900 Accounts receivable 62,500 51,000 Short-term debt investments (available-for-sale) 34,800 18,100 Inventory 39,600 60,200 Prepaid rent 4,900 4,000 Equipment 154,500 130,100 Accumulated depreciation—equipment (34,800 ) (25,300 ) Copyrights 46,300 50,400 Total assets $313,900 $295,400 Accounts payable $46,000 $40,200 Income taxes payable 4,000 6,000 Salaries and wages payable 8,100...
Pearl Inc., a greeting card company, had the following statements prepared as of December 31, 2020....
Pearl Inc., a greeting card company, had the following statements prepared as of December 31, 2020. PEARL INC. COMPARATIVE BALANCE SHEET AS OF DECEMBER 31, 2020 AND 2019 12/31/20 12/31/19 Cash $6,100 $7,100 Accounts receivable 62,400 51,000 Short-term debt investments (available-for-sale) 34,700 18,100 Inventory 40,400 60,300 Prepaid rent 4,900 4,000 Equipment 154,100 130,600 Accumulated depreciation—equipment (34,900 ) (24,800 ) Copyrights 46,400 49,800 Total assets $314,100 $296,100 Accounts payable $46,500 $40,200 Income taxes payable 4,000 6,000 Salaries and wages payable 8,100...
Metlock Inc., a greeting card company, had the following statements prepared as of December 31, 2020....
Metlock Inc., a greeting card company, had the following statements prepared as of December 31, 2020. METLOCK INC. COMPARATIVE BALANCE SHEET AS OF DECEMBER 31, 2020 AND 2019 12/31/20 12/31/19 Cash $5,900 $7,100 Accounts receivable 62,000 51,000 Short-term debt investments (available-for-sale) 35,000 18,100 Inventory 40,400 59,900 Prepaid rent 5,000 4,000 Equipment 153,300 129,100 Accumulated depreciation—equipment (35,000 ) (24,800 ) Copyrights 46,300 50,300 Total assets $312,900 $294,700 Accounts payable $46,500 $40,200 Income taxes payable 4,100 6,100 Salaries and wages payable 8,100...
Sage Inc., a greeting card company, had the following statements prepared as of December 31, 2020....
Sage Inc., a greeting card company, had the following statements prepared as of December 31, 2020. SAGE INC. COMPARATIVE BALANCE SHEET AS OF DECEMBER 31, 2020 AND 2019 12/31/20 12/31/19 Cash $6,100 $6,900 Accounts receivable 62,500 51,000 Short-term debt investments (available-for-sale) 34,800 18,100 Inventory 39,600 60,200 Prepaid rent 4,900 4,000 Equipment 154,500 130,100 Accumulated depreciation—equipment (34,800 ) (25,300 ) Copyrights 46,300 50,400 Total assets $313,900 $295,400 Accounts payable $46,000 $40,200 Income taxes payable 4,000 6,000 Salaries and wages payable 8,100...
Culver Inc., a greeting card company, had the following statements prepared as of December 31, 2020....
Culver Inc., a greeting card company, had the following statements prepared as of December 31, 2020. CULVER INC. COMPARATIVE BALANCE SHEET AS OF DECEMBER 31, 2020 AND 2019 12/31/20 12/31/19 Cash $6,100 $7,000 Accounts receivable 62,200 51,500 Short-term debt investments (available-for-sale) 34,900 17,900 Inventory 40,300 60,500 Prepaid rent 5,000 3,900 Equipment 153,200 131,200 Accumulated depreciation—equipment (35,000 ) (24,700 ) Copyrights 46,200 49,800 Total assets $312,900 $297,100 Accounts payable $46,000 $40,000 Income taxes payable 4,000 6,000 Salaries and wages payable 7,900...
Sheffield Inc., a greeting card company, had the following statements prepared as of December 31, 2020....
Sheffield Inc., a greeting card company, had the following statements prepared as of December 31, 2020. SHEFFIELD INC. COMPARATIVE BALANCE SHEET AS OF DECEMBER 31, 2020 AND 2019 12/31/20 12/31/19 Cash $5,900 $6,900 Accounts receivable 61,400 50,800 Short-term debt investments (available-for-sale) 35,000 17,800 Inventory 40,000 59,400 Prepaid rent 5,000 3,900 Equipment 155,200 129,000 Accumulated depreciation—equipment (35,000 ) (25,000 ) Copyrights 45,600 49,900 Total assets $313,100 $292,700 Accounts payable $46,300 $39,800 Income taxes payable 3,900 6,100 Salaries and wages payable 7,900...
Buffalo Inc., a greeting card company, had the following statements prepared as of December 31, 2017....
Buffalo Inc., a greeting card company, had the following statements prepared as of December 31, 2017. BUFFALO INC. COMPARATIVE BALANCE SHEET AS OF DECEMBER 31, 2017 AND 2016 12/31/17 12/31/16 Cash $6,100 $7,100 Accounts receivable 62,400 51,000 Short-term debt investments (available-for-sale) 34,700 18,100 Inventory 40,400 60,300 Prepaid rent 4,900 4,000 Equipment 154,100 130,600 Accumulated depreciation—equipment (34,900 ) (24,800 ) Copyrights 46,400 49,800 Total assets $314,100 $296,100 Accounts payable $46,500 $40,200 Income taxes payable 4,000 6,000 Salaries and wages payable 8,100...
Skysong Inc., a greeting card company, had the following statements prepared as of December 31, 2017....
Skysong Inc., a greeting card company, had the following statements prepared as of December 31, 2017. SKYSONG INC. COMPARATIVE BALANCE SHEET AS OF DECEMBER 31, 2017 AND 2016 12/31/17 12/31/16 Cash $5,900 $7,000 Accounts receivable 61,400 51,500 Short-term debt investments (available-for-sale) 35,000 18,200 Inventory 40,000 60,500 Prepaid rent 5,000 4,100 Equipment 152,900 131,100 Accumulated depreciation—equipment (35,200 ) (25,100 ) Copyrights 45,800 50,000 Total assets $310,800 $297,300 Accounts payable $46,100 $40,100 Income taxes payable 3,900 5,900 Salaries and wages payable 8,000...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT