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Condensed financial data follow for Blossom Ltd. Blossom reports under ASPE. BLOSSOM LTD. Balance Sheet December 31 Assets 2021 2020 Cash $92,250 $48,700 Accounts receivable
Condensed financial data follow for Blossom Ltd. Blossom reports under ASPE. BLOSSOM LTD. Balance Sheet December 31 Assets 2021 2020 Cash $92,250 $48,700 Accounts receivable 75,700 41,100 Inventory 125,900 95,900 Prepaid expenses 39,300 25,800 Long-term investments 127,900 113,900 Property, plant, and equipment 270,200 242,500 Accumulated depreciation (51,700) (51,100 ) Total assets $679,550 $516,800 Liabilities and Shareholders' Equity Accounts payable Accrued expenses payable Notes payable $95,000 $78,000 12,600 7,800 100,900 150,000 Common shares 242,900 185,900 Retained earnings 228,150 95,100 Total liabilities and shareholders' equity $679,550 $516,800 BLOSSOM LTD. Income Statement Year Ended December 31 2021 Sales $490,300 Cost of goods sold 185,600 Gross profit 304,700 Operating expenses $57,900 Depreciation expense 45,100 Loss on sale of equipment 8,600 111,600 Profit from operations 193,100 Other expenses Interest expense 5,420 Profit before income tax 187,680 Interest expense 5,420 Profit before income tax 187,680 Income tax expense 42,000 Profit $145,680 1. Additional information: New equipment costing $84,400 was purchased for $28,100 cash and a $56,300 note payable. 2. Equipment with an original cost of $56,700 was sold at a loss of $8,600. 3. Notes payable matured during the year and were repaid. 4. A long-term investment was acquired for cash. 5. Accounts payable relate only to merchandise creditors. 6. Accrued expenses payable and prepaid expenses relate to operating expenses. Prepare the operating section of the cash flow statement using the direct method assuming that accounts payable relate only to merchandise creditors and that accrued expenses payable and prepaid expenses relate to operating expenses. (Show amounts that decrease cash flow with either a sign eg.-15,000 or in parenthesis eg. (15,000).) BLOSSOM LTD. Cash Flow Statement (Partial)-Direct Method
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