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Problem 22-7 (a) (direct method) SFP accounts of Blossom Inc., which follows IFRS, follow: BLOSSOM INC. Comparative Statement of Financial Position Accounts December 31, 2020
Problem 22-7 (a) (direct method) SFP accounts of Blossom Inc., which follows IFRS, follow: BLOSSOM INC. Comparative Statement of Financial Position Accounts December 31, 2020 and 2019 December 31 Debit accounts 2020 2019 Cash $44,785 $33,400 Accounts receivable 67,940 60,500 Merchandise inventory 29,810 23,850 Long-term FV-NI investments 23,030 40,300 Machinery 29,450 18,250 Buildings 67,140 55,850 Land 7,500 7,500 $269,655 $239,650 Credit accounts Allowance for doubtful accounts Accumulated depreciation-machinery Accumulated depreciation-buildings Accounts payable Accrued liabilities Income taxes payable Long-term note payable-non-trade Common shares Retained earnings $1,080 5,595 13,505 29,495 2,425 850 26,600 150,000 40,105 $269,655 $330 2,230 9,000 24,250 1,180 1,350 31,600 125,000 44,710 $239,650 Additional information: Blossom Inc. has adopted the policy of classifying interest paid as operating activities and dividends paid as financing activities. 1. Cash dividends declared during the year were $17,515. 2. A 20% stock dividend was declared during the year and $25,000 of retained earnings was capitalized. 3. FV-NI investments that cost $20,100 and had a fair value at December 31, 2019, of $24,700 were sold during the year for $22,990. 4. Machinery that cost $3,840 and had $750 of depreciation accumulated was sold for $2,210. Blossom's 2020 statement of income is as follows: $643,000 382,000 261,000 180,500 Sales revenue Cost of goods sold Gross margin Operating expenses (includes $8,620 depreciation and $5,400 bad debts) Income from operations Loss on disposal of FV-NI investments $(1,710) Interest expense (3,000) Loss on disposal of machinery (880) Income before tax Income tax expense Net income 80,500 (5,590) 74,910 37,000 $37,910 Calculate net cash flow from operating activities using the direct method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).) BLOSSOM INC. Statement of Cash Flow For the Year Ended December 31, 2020 $
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