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The income statement and unclassified statement of financial position for Blossom, Inc. follow: BLOSSOM, INC. Statement of Financial Position December 31 Assets 2018 Cash $97,000
The income statement and unclassified statement of financial position for Blossom, Inc. follow: BLOSSOM, INC. Statement of Financial Position December 31 Assets 2018 Cash $97,000 Held for trading investments 120,000 Accounts receivable 70,000 Inventory 122,000 Prepaid expenses 18,000 Property, plant, and equipment 265,000 Accumulated depreciation (45,000) Total assets $647,000 Liabilities and Shareholders' Equity Accounts payable $90,000 Accrued liabilities 10,000 Bank loan payable 107,000 Common shares 200,000 Retained earnings 240,000 Total liabilities and shareholders' equity $647,000 2017 $47,000 112,000 40,000 92,800 26,000 240,000 (52,000) $505,800 $70,000 7,000 173,800 150,000 105,000 $505,800 BLOSSOM, INC. Income Statement Year Ended December 31, 2018 Sales Cost of goods sold Gross profit Operating expenses Income from operations Other revenues and expenses Unrealized gain on held for trading investments $8,000 Interest expense (4,700) Income before income tax Income tax expense Net income $492,000 185,400 306,600 116,400 190,200 3,300 193,500 40,000 $153,500 Additional information: 1. Prepaid expenses and accrued liabilities relate to operating expenses. 2. An unrealized gain on held for trading investments of $8,000 was recorded. 3. New equipment costing $80,000 was purchased for $20,000 cash and a $60,000 long-term bank loan payable. 4. Old equipment having an original cost of $55,000 was sold for $1,000. 5. Accounts payable relate to merchandise creditors. 6. Some of the bank loan was repaid during the year. 7. A dividend was paid during the year. 8. Operating expenses include $46,000 of depreciation expense and a $1,000 loss on disposal of equipment. (a) Prepare the statement of cash flows, 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).) Note X to the Statement of Cash Flows: During the year, the company purchased equipment costing $ by paying $20,000 cash and issuing a $60,000 bank loan payable
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