Blossom Company Comparative Balance Sheets December 31 Assets 2017 2016 $ 76,650
ID: 2558799 • Letter: B
Question
Blossom Company
Comparative Balance Sheets
December 31
Assets
2017
2016
$ 76,650
$ 43,800
43,800
30,660
61,320
43,800
131,400
170,820
(70,080
)
(52,560
)
$243,090
$236,520
Liabilities and Stockholders’ Equity
$ 41,610
$ 32,850
15,330
17,520
37,230
72,270
39,420
30,660
109,500
83,220
$243,090
$236,520
Blossom Company
Income Statement
For the Year Ended December 31, 2017
$529,980
383,250
146,730
$39,420
13,140
52,560
94,170
6,570
87,600
17,520
$ 70,080
Adjustments to reconcile net income to
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Presented below are the financial statements of Blossom Company.Blossom Company
Comparative Balance Sheets
December 31
Assets
2017
2016
Cash$ 76,650
$ 43,800
Accounts receivable43,800
30,660
Inventory61,320
43,800
Property, plant, and equipment131,400
170,820
Accumulated depreciation(70,080
)
(52,560
)
Total$243,090
$236,520
Liabilities and Stockholders’ Equity
Accounts payable$ 41,610
$ 32,850
Income taxes payable15,330
17,520
Bonds payable37,230
72,270
Common stock39,420
30,660
Retained earnings109,500
83,220
Total$243,090
$236,520
Blossom Company
Income Statement
For the Year Ended December 31, 2017
$529,980
Cost of goods sold383,250
Gross profit146,730
Selling expenses$39,420
Administrative expenses13,140
52,560
Income from operations94,170
Interest expense6,570
Income before income taxes87,600
Income tax expense17,520
Net income$ 70,080
Additional data:
1. Depreciation expense was $38,325. 2. Dividends declared and paid were $43,800. 3. During the year equipment was sold for $18,615 cash. This equipment cost $39,420 originally and had accumulated depreciation of $20,805 at the time of sale.
Explanation / Answer
Net cash flow from operating activities Net income 70,080 Adjustments to reconcile net income to net cash provided by operating activities Depreciation expense 38,325 increase in accounts receivable -13140 increase in inventory -17520 increase in accounts payable 8760 decrease in income taxes payable -2190 14,235 Net cash provided by operating activities 84,315 Cash from investing activities cash from sale of plant asset 18,615 Cash used by investing activities 18,615 Net cash from financing activities Cash dividend -43,800 Redemption of bonds -35040 cash from stock issue 8760 Cash used by financing activities -70,080 Net increase in cash 32,850 cash at beginning of the year 43,800 cash at year end 76,650 Free cash flow = cash from operating activities -capital expenditure-cash dividend 84,315-0-43800 40,515