Condensed financial data of Blossom Inc. follow. Blossom Inc. Comparative Balance Sheets December 31 Assets 2017 2016
Question:
Condensed financial data of Blossom Inc. follow.
Blossom Inc. | ||
---|---|---|
Comparative Balance Sheets | ||
December 31 | ||
Assets | 2017 | 2016 |
Cash | $ 80,800 | $ 48,400 |
Accounts receivable | 87,800 | 38,000 |
Inventory | 112,500 | 102,850 |
Prepaid expenses | 28,400 | 26,000 |
Long-term investments | 138,000 | 109,000 |
Plant assets | 285,000 | 242,500 |
Accumulated depreciation | (50,000) | (52,000) |
Total | $682,500 | $514,750 |
Liabilities and Stockholders' Equity | ||
Accounts payable | $ 102,000 | $ 67,300 |
Accrued expenses payable | 16,500 | 21,000 |
Bonds payable | 110,000 | 146,000 |
Common stock | 220,000 | 175,000 |
Retained earnings | 234,000 | 105,450 |
Total | $682,500 | $514,750 |
Blossom Inc. | ||
---|---|---|
Income Statement Data | ||
For the Year Ended December 31, 2017 | ||
Sales revenue | $ 388,460 | |
Less: | ||
Cost of goods sold | $ 135,460 | |
Operating expenses, excluding depreciation | 12,410 | |
Depreciation expense | 46,500 | |
Income tax expense | 27,280 | |
Interest expense | 4,730 | |
Loss on disposal of plant assets | 7,500 | 233,880 |
Net income | $ 154,580 |
Additional information:
1.New plant assets costing $100,000 were purchased for cash during the year.
2.Old plant assets having an original cost of $57,500 and accumulated depreciation of $48,500 were sold for $1,500 cash.
3.Bonds payable matured and were paid off at face value for cash.
4.A cash dividend of $32,018 was declared and paid during the year. Further analysis reveals that accounts payable pertain to merchandise creditors.
Prepare a statement of cash flows for Blossom Inc. using the direct method. (Show amounts in the investing and financing sections that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)
Principles Of Managerial Finance
ISBN: 978-0136119463
13th Edition
Authors: Lawrence J. Gitman, Chad J. Zutter