Exercise 12-7 Shown below are comparative balance sheets for Blossom Company Blo

Question

Exercise 12-7 Shown below are comparative balance sheets for Blossom Company Blossom Company Comparative Balance Sheets December 31 2016 $ 33,462 115,596 287,469 152,100 304,200 Assets Cash Accounts receivable Inventory Land Equipment Accumulated depreciation-equipment Total Liabilities and Stockholders Equity Accounts payable Bonds payable Common stock ($1 par) Retained earnings Total 2017 $ 103,428 133,848 254,007 121,680 395,460 (100,386 (48,672) $908,037 $844,155 $ 59,319 228,150 328,536 292,032 $908,037 65,403 304,200 264,654 209,898 $844,155 Additional information: 1. Net income for 2017 was $141,453 2. Depreciation expense was $51,714 3. Cash dividends of $59,319 were declared and paid 4. Bonds payable amounting to $76,050 were redeemed for cash $76,050 5. Common stock was issued for $63,882 cash 6. No equipment was sold during 2017 7. Land was sold for its book value Prepare a statement of cash flows for 2017 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))

Explanation / Answer

Statment of cash flow :

Cash flow from operating activity Net income 141453 Adjustment to reconcile net income Depreciation expenses 51714 Increase account receivable (18252) Decrease inventory 33462 Decrease account payable (6084) Net cash flow from operating activity 202293 Cash flow from investing activity Land sold 30420 Equipment purchase (91260) Net cash flow from investing activity (60840) Cash flow from financing activity Dividend paid (59319) Bond redeem (76050) Common stock issue 63882 Net cash flow from financing activity (71487) Net cash flow 69966 Beginning cash 33462 Ending cash 103428

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