The comparative unclassified statement of financial position for Blossom Ltd. follows: BLOSSOMLTD. Statement of Financial Position December 31 Assets 2021 2020 Cash $57,000 $20,000 Accounts receivable 82,000 77,500 Inventory 170,000 182,000 Estimated inventory returns 5,000 3,000 Long-term investments 77,000 150,000 Equipment 250,000 162,000 Accumulated depreciation (74,000) (38,000) Total assets $567,000 $556,500 Liabilities and Shareholders' Equity Accounts $24,000 $ 49,000 Refund liability 7,000 5,000 Bank loan payable (noncurrent) 146,000 194,500 Bank loan payable (noncurrent) 146,000 194,500 Common shares 195,000 171,000 Retained earnings 195,000 137,000 Total liabilities and shareholders' equity $567,000 $556,500 Additional information pertaining to 2021: 1. Net income was $104,800. 2. Sales were $980,000. 3. Cost of goods sold was $750,000. 4. Operating expenses were $49,000, exclusive of depreciation expense. 5. Depreciation expense was $36,000. 6. Interest expense was $18,000. 7. Income tax expense was $28,000. 8. Long-term investments were sold at a gain of $5,800. 9. No equipment was sold during the year. 10. $48,500 of the bank loan was repaid during the year. 11. Common shares were issued for $24,000. BLOSSOM LTD. Statement of Cash Flows-Indirect Method Year Ended December 31, 2021 Cash flows from operating activities Net income $ 104,800 Adjustments to reconcile net income to Net cash provided by operating activities Depreciation expense $ 36,000 Gain on sale of long-term investments -5,800 Increase in accounts receivable -14,500 Decrease in inventory 20,000 Increase in estimated inventory returns -5000 Decrease in accounts payable -23,000 Increase in refund liability 5,000 Increase in refund liability 5,000 -56700 Net cash provided by operating activities 161500 Cash flows from investing activities Proceeds from sale of long-term investments $ 78800 Purchase of equipment -88000 Net cash used by investing activities -9200 Cash flows from financing activities Issue of common shares $ 24,000 Repayment of bank loan -77,500 Payment of cash dividends -46800 Net cash used by financing activities -100300 Repayment of bank loan -77,500 Payment of cash dividends -46800 Net cash used by financing activities -100300 Net increase in cash -24000 Cash, January 1 20,000 Cash, December 31 -44000