Question

Exercise 12-9

Here are comparative balance sheets for Blossom Company.

Blossom Company Comparative Balance Sheets December 31
Assets		2019			2018
Cash		$ 73,500			$ 32,900
Accounts receivable		86,200			70,600
Inventory		169,600			187,200
Land		73,300			101,200
Equipment		259,600			200,700
Accumulated depreciation—equipment		(66,400	)		(33,900	)
Total		$595,800			$558,700
Liabilities and Stockholders’ Equity
Accounts payable		$ 35,300			$ 46,600
Bonds payable		151,500			203,000
Common stock ($1 par)		217,200			174,700
Retained earnings		191,800			134,400
Total		$595,800			$558,700

Additional information:

1.		Net income for 2019 was $101,500.
2.		Cash dividends of $44,100 were declared and paid.
3.		Bonds payable amounting to $51,500 were redeemed for cash $51,500.
4.		Common stock was issued for $42,500 cash.
5.		No equipment was sold during 2019, but land was sold at cost.

Prepare a statement of cash flows for 2019 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).)

Answer 1

Statement of Cash Flows
For the Year Ended December 31, 2019
Cash Flows from Operating Activities:
Net income		101500
Adjustments to reconcile net income to
Net cash provided by operating activities
Depreciation expense	32500
Increase in Accounts Receivable	-15600
Decrease in inventory	17600
Decrease in accounts payable	-11300
		23200
Net cash provided by operating activities		124700
Cash Flows from Investing Activities:
Sale of Land	27900
Purchase of Equipment	-58900
Net Cash used by Investing Activities		-31000
Cash Flows from Financing Activities
Payment of Cash Dividends	-44100
Redemption of Bonds Payable	-51500
Issuance of Common Stock	42500
Net Cash Used by Financing Activities		-53100
Net Increase in Cash		40600
Cash at Beginning of Period		32900
Cash at End of Period		73500