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 $492,000 185,400 306,600 116,400 190,200 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 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. Statement of Cash Flows-Direct Method $ Cash Payments $ $ $ $ by Note X to the Statement of Cash Flows: During the year, the company purchased equipment costing $ paying $20,000 cash and issuing a $60,000 bank loan payable