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James Smith and Mary Johnson are examining the following summary of cash flows for Blossom Company for the year ended January 31, 2027. Inflows
James Smith and Mary Johnson are examining the following summary of cash flows for Blossom Company for the year ended January 31, 2027. Inflows Sales revenue $383,930 Capital stock sales 404,800 Sale of investment (purchased below) 79,840 Proceeds from note (to purchase truck below) 20,080 Interest received on investments 6,057 Total 894,707 Outflows Purchase of fixtures and equipment 319.650 Cost of merchandise purchased for resale 257,862 Payment of operating expenses 170,530 Purchase of investment 75,520 Purchase of truck with note proceeds (shown above) 20.080 Purchase of treasury stock 10,050 Payment of interest on note payable 2,988 Total 856,680 Net increase in cash $38.027 James claims that this statement shows that Blossom had a superb first year, with cash increasing $38,027. Mary replies that it was not a superb first year. Rather, she says, the year was an operating failure and that $38,027 is not the actual increase in cash. The cash balance at the beginning of the year was $140.490. (a) Using the data provided, determine the net income/(loss) for the year ended January 31, 2027. Depreciation expense was $55.140. (Enter negative amounts using either a negative sign preceding the number eg. 45 or parentheses e.g. (45).) Net income/(loss) $ Using the data provided, prepare a statement of cash flows in proper form using the indirect method. The only noncash items in the income statement are depreciation and the gain from the sale of the investment. (Show amounts that decrease cash flow with either a-sign eg.-15,000 or in parentheses eg. (15,000).) Adjustments to reconcile net income to BLOSSOM COMPANY Statement of Cash Flows
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