Problem 13-23 Your answer is partially correct. Try again. Kate Petusky prepared
ID: 2599461 • Letter: P
Question
Problem 13-23 Your answer is partially correct. Try again. Kate Petusky prepared Blossom Controls’ balance sheet and income statement for 2016. Before she could complete the statement of cash flows, she had to leave town to attend to a family emergency. Because the full set of statements must be provided to the auditors today, Blossom’s president, Lance Meyers, has asked you to prepare the statement of cash flows. Meyers has provided you with the balance sheets and income statement that Petusky prepared, as well as some notes she made: Blossom Controls Income Statement For the Year Ended December 31, 2016 Sales revenue $ 128,800 Cost of goods sold 70,260 Gross margin 58,540 Selling expense $13,040 Administrative expense 8,080 Salaries expense 20,270 Depreciation expense 1,900 Interest expense 4,060 47,350 Income before gain and taxes 11,190 Gain on sale of Land 905 Income tax expense 829 Net income $ 11,266 Blossom Controls Comparative Balance Sheets As of December 31 2016 2015 Cash $ 5,130 $ 4,270 Accounts receivable, net 6,380 5,550 Inventory 31,710 34,200 Total current assets 43,220 44,020 Property, plant, & equipment, net 211,790 215,490 Total Assets $ 255,010 $ 259,510 Accounts payable $ 3,430 $ 6,120 Accrued expenses 2,580 2,330 Taxes payable 2,120 2,930 Bonds payable 60,280 50,420 Total liabilities 68,410 61,800 Common stock 125,270 125,270 Retained earnings 61,330 72,440 Total stockholders’ equity 186,600 197,710 Total liabilities & stockholders’ equity $ 255,010 $ 259,510 • Equipment with an original cost of $35,090 was sold for $20,365. The book value of the equipment was $19,460. • On June 1, 2013, the company purchased new equipment for cash at a cost of $17,660. • At the end of the year the company issued bonds payable for $9,860 cash. The bonds will mature on December 31, 2017. • The company paid $22,376 in cash dividends for the year. Using the indirect method, prepare Blossom Controls' statement of cash flows for 2016. (Show amounts that decrease cash flow with either a - sign, e.g. -15,000 or in parentheses, e.g. (15,000).) Blossom Control Statement of Cash Flows For the Year Ended December 31, 2016 $ $ Net cash by activities Net cash by activities Net cash by activities $ Question Attempts: 2 of 10 used Save for later Submit Answer
Explanation / Answer
Answer:-
Blossom Controls Statement of Cash Flow (Using Indirect Method) For the year ended December 31,2016 Particulars Amount $ $ Cash flow from opreating activities Net Income 11266 Adjustments to reconcile net income to net cash provided by opreating activities Adjustment for non cash effects Depreciation 1900 Gain on sale of Land -905 Change in opreating assets & liabilities Increase in Accounts Receiviable 6380-5550 -830 Decrease in Inventory 31710-34200 2490 Decrease in Accounts payable 3430-6120 -2690 Increase in Accrued expenses 2580-2330 250 Decrease in Taxes payable 2120-2930 -810 Net cash flow from opreating activities (a) 10671 Cash Flow from Financing activities Bonds issued for cash 9860 Cash dividends paid -22376 Net cash Flow from Financing activities (b) -12516 Cash Flow from Investing activities Equipment purchased -17660 Equipment sold 20365 Net cash Flow from Investing activities (c) 2705 Net Channge in cash c=a+b+c 860 Beginning cash balance 4270 Closing cash balance 5130