The statement of income and unclassified statement of financial position for Blossom, Inc. follow: BLOSSOM, INC. Statement of Financial Position December 31 Assets 2021 2020 Cash $98,400 $48, 100 Trading investments 122,000 115,000 Accounts receivable 74,000 43,000 Inventory 120.800 90,800 Estimated inventory returns 2,900 2,600 Prepaid expenses 18,800 26,400 Equipment 327,500 297,000 Accumulated depreciation (50,000) (53,100) Total assets $714,400 $569,800 Liabilities and Shareholders' Equity Accounts payable $97,500 $74,000 Liabilities and Shareholders' Equity Accounts payable $97,500 $74,000 Property tax payable 9,300 6,900 Refund liability 1,100 700 Bank loan payable-current portion 87,000 147,700 Bank loan payable-noncurrent portion 61,500 21,500 Common shares 210,000 190,000 Retained earnings 248,000 129,000 Total liabilities and shareholders' equity $714,400 $569,800 BLOSSOM, INC. Statement of Income Year Ended December 31, 2021 Sales $560,750 Cost of goods sold 186,600 Gross profit 374,150 Statement of Income Year Ended December 31, 2021 Sales $560,750 Cost of goods sold 186,600 Gross profit 374,150 Operating expenses 116,440 Income from operations 257,710 Other income and expenses Unrealized gain on trading investments $7,000 Interest expense (4,790) 2,210 Income before income tax 259,920 Income tax expense 43,000 Net income $216,920 Additional information regarding 2021: 1. Prepaid expenses and property tax payable relate to operating expenses. 2. New equipment costing $89,000 was purchased for $22,900 cash and a $66,100 long-term bank loan payable. 3. Old equipment having an original cost of $58,500 was sold for $1,800. 4. Accounts payable relate to inventory suppliers. 5. Some of the bank loan was repaid during the year. 6. A dividend was paid during the year. 7. Operating expenses include $47,000 of depreciation expense and a $6,600 loss on disposal of equipment. 8. Common shares were issued for $43,000 cash during the year and some common shares were bought back and retired at the cost they were originally issued at. Prepare the statement of cash flows, using the indirect 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 Flows Year Ended December 31, 2021 Cash flows from operating activities 216920 Net income Adjustments to reconcile net income to 5 Loss on disposal of equipment Net income Net cash provided by operating activities Cash flows from investing activities Purchase of equipment Purchase of equipment > Proceeds from disposal of equipment Net cash used by investing activities Cash flows from financing activities Sale of common shares Repurchase of common shares For interest > Repayment of bank loan payable Net cash used by financing activities Net increase in cash Cash January 1 For interest Repayment of bank loan payable Net cash used by financing activities Net increase in cash Cash, January 1 Cash, December 31 > $ by Note X to the Statement of Cash Flows: During the year, the company purchased equipment costing $ paying $22,900 cash and issuing a $66,100 bank loan payable. Touthealand Media