Question

The comparative statement of financial position of Blue Spruce Inc. as at June 30, 2020, and a statement of comprehensive income for the 2020 fiscal year follow: BLUE SPRUCE INC. Statement of Financial Position June 30, 2020 June 30 Assets 2020 2019 Cash $ 20,000 $ 44,000 Accounts receivable 86,200 75,600 Inventory 104,000 101,400 Prepaid expenses 2,700 5,000 FV-OCI investments 47,800 44,400 Equipment 179,000 159,000 Accumulated depreciation equipment (36,000) (23,400) Total $403,700 $ 406,000 Liabilities and Shareholders' Equity Accounts payable $ 102,000 $ 95,000 Income tax payable 1,800 3,000 Dividends payable 6,000 Long-term notes payable 85,100 118,500 Common shares 31,400 22,200 Retained earnings 165,000 158,300 Accumulated other comprehensive income 12,400 9,000 Total $403,700 $406,000 BLUE SPRUCE INC. Statement of Comprehensive Income For the Year Ended June 30, 2020 Net sales $335,000 Cost of goods sold 177,000 Gross profit 158,000 Operating expenses 121,000 Income from operations 37,000 Interest expense 8,100 Income before income tax 28,900 Income tax 5,000 Net income 23,900 Other comprehensive income Unrealized gain or loss-OCI 3,400 Comprehensive income $ 27,300

Answer 1

The answer has been presented in the supporting sheet. All the parts has been solved with detailed explanation and calculation. For detailed answer refer to the supporting sheet.

Answer 23900 BLUE SprUCE INC. Statement of Cash Flows For the Year ended June 2020 5 Cash Flow From Operating Activities 6 Net Income Adjustments to reconcile net income to net cash 7 provided by operating activities 8 Depreciation expense 9 Increase in account receivable (75600-86200) 10 Increase in inventory (104000-101400 11 Decrease in prepaid expense (5000-2700) 12 Increase in account payable (102000-95000) 13 Decrease in income taxes payable (3000-1800) 12600 -10600 -2600 2300 7000 -1200 7500 31400 15 Net cash inflow from operating activities 16 Cash Flow From Investing Activities Cash Paid for purchase of equipment (179000-159000- 17 8000) 18 Net cash outflow from investing activities - 12000 - 12000

А 19 Cash Flow From Financing activities 20 Dividend Paid (17200-6000) - 11200 Cash Paid for long term note payable (118500- 21 85100+8000) -41400 Cash received from issue of common stock (31400- 22 22200) 9200 23 Net cash outflow from financing activities -43400 24 Net cash outflow from all activities -24000 25 Beginning cash balance 44000 26 Ending cash balance 20000 28 During the year, equipment with a cost of $ 8000 was purchased in exchange for a note payable. dividend declared during the period = Beginning retained earning + net income * ending balance = 158300+23900-165000 32 = $ 17200

BLUE SprUCE INC. Statement of Cash Flows For the Year ended June 2020 Cash Flow From Operating activities (Direct Method) 324400 -172600 Cash received from customers Cash paid for purchases (95000+(104000+177000- 101400)-102000) Cash paid for operating expenses (121000-12600- (5000-2700)) Cash Paid for interest expense Cash paid for income tax (5000+3000-1800) -106100 -8100 -6200 -293000 31400 Net cash inflow from operating activities