Question

Condensed financial data of Blossom Company follow Blossom Company Comparative Balance Sheets December 31 Assets Cash Accounts receivable Inventory Prepaid expenses Long-term investments Plant assets Accumulated depreciation Total 2017 2016 $116,160 91,200 246,840 62,400 261,600 582,000 $193,920 210,720 270,000 68,160 331,200 684,000 (120,000 124,800) $1,638,000 $1,235,400 Liabilities and Stockholders' Equity Accounts payable Accrued expenses payable Bonds payable Common stock Retained earnings Total $ 161,520 50,400 350,400 420,000 253,080 $1,638,000 $1,235,400 $244,800 39,600 264,000 528,000 561,600 Blossom Company Income Statement Data For the Year Ended December 31, 2017 Sales revenue $932,304 Less Cost of goods sold Operating expenses, excluding depreciation Depreciation expense Income tax expense Interest expense Loss on disposal of plant assets $325,104 29,784 111,600 65,472 11,352 18,000 561,312 $370,992 Net income Additional information: 1. New plant assets costing $240,000 were purchased for cash during the year 2. Old plant assets having an original cost of $138,000 and accumulated depreciation of $116,400 were sold for $3,600 cash 3. Bonds payable matured and were paid off at face value for cash. 4. A cash dividend of $62,472 was declared and paid during the year Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with elther a -sign e.g. -15,000 or in parenthesis e.g. (15,000).)

Answer 1

Net cash flow from operating activities
Net income					370,992
Adjustments to reconcile net income
to net cash provided by operating activities
Depreciation expense				111,600
loss on disposal of plant assets				18,000
increase in accounts receivable				-119520
increase in inventory				-23160
increase in prepaid expense				-5760
increase in accounts payable				83280
decrease in accrued expenses payable				-10800
					53,640
Net cash provided by operating activities					424,632
Cash from investing activities
purchase of new plant asset				-240,000
cash from sale of plant asset				3,600
Cash paid for purchase of investment				-69600
Cash used by investing activities					-306,000
Net cash from financing activities
Cash dividend				-62,472
Redemption of bonds				-86400
cash from stock issue				108000
Cash used by financing activities				-40,872	-40,872
Net increase in cash					77,760
cash at beginning of the year					116,160
cash at year end					193,920