Blossom Company, a major retailer of bicycles and accessories, operates several stores and is a publicly traded company. The comparative balance sheet and income statement for Blossom as of May 31, 2020, are as follows. The company is preparing its statement of cash flows. BLOSSOM COMPANY COMPARATIVE BALANCE SHEET AS OF MAY 31 2020 2019 Current assets Cash $28,000 $20,200 Accounts receivable 74,900 58,500 Inventory 220,400 247,500 Prepaid expenses 9,000 7,000 Total current assets 332,300 333,200 Plant assets Plant assets 594,000 504,600 Less: Accumulated depreciation—plant assets 151,500 124,900 Net plant assets 442,500 379,700 Total assets $774,800 $712,900 Current liabilities Accounts payable $121,800 $114,600 Salaries and wages payable 46,800 71,900 Interest payable 26,800 25,000 Total current liabilities 195,400 211,500 Long-term debt Bonds payable 70,000 100,000 Total liabilities 265,400 311,500 Stockholders’ equity Common stock, $10 par 370,000 280,000 Retained earnings 139,400 121,400 Total stockholders’ equity 509,400 401,400 Total liabilities and stockholders’ equity $774,800 $712,900 BLOSSOM COMPANY INCOME STATEMENT FOR THE YEAR ENDED MAY 31, 2020 Sales revenue $1,259,200 Cost of goods sold 716,700 Gross profit 542,500 Expenses Salaries and wages expense 253,400 Interest expense 74,800 Depreciation expense 26,600 Other expenses 8,200 Total expenses 363,000 Operating income 179,500 Income tax expense 43,100 Net income $136,400 The following is additional information concerning Blossom’s transactions during the year ended May 31, 2020. 1. All sales during the year were made on account. 2. All merchandise was purchased on account, comprising the total accounts payable account. 3. Plant assets costing $89,400 were purchased by paying $20,400 in cash and issuing 6,900 shares of stock. 4. The “other expenses” are related to prepaid items. 5. All income taxes incurred during the year were paid during the year. 6. In order to supplement its cash, Blossom issued 2,100 shares of common stock at par value. 7. Cash dividends of $118,400 were declared and paid at the end of the fiscal year. Prepare a statement of cash flows for Blossom Company for the year ended May 31, 2020, using the direct method. (A reconciliation of net income to net cash provided is not required.) (Show amounts in the investing and financing sections that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

Blossom Company, a major retailer of bicycles and accessories, operates several stores and is a publicly traded company. The comparative balance sheet and income statement for Blossom as of May 31, 2020, are as follows. The company is preparing its statement of cash flows. BLOSSOM COMPANY COMPARATIVE BALANCE SHEET AS OF MAY 31 2020 2019 Current assets Cash $28,000 $20,200 Accounts receivable 74,900 58,500 Inventory 220,400 247,500 Prepaid expenses 9,000 7,000 Total current assets 332,300 333,200 Plant assets Plant assets 594,000 504,600 Less: Accumulated depreciation—plant assets 151,500 124,900 Net plant assets 442,500 379,700 Total assets $774,800 $712,900 Current liabilities Accounts payable $121,800 $114,600 Salaries and wages payable 46,800 71,900 Interest payable 26,800 25,000 Total current liabilities 195,400 211,500 Long-term debt Bonds payable 70,000 100,000 Total liabilities 265,400 311,500 Stockholders’ equity Common stock, $10 par 370,000 280,000 Retained earnings 139,400 121,400 Total stockholders’ equity 509,400 401,400 Total liabilities and stockholders’ equity $774,800 $712,900 BLOSSOM COMPANY INCOME STATEMENT FOR THE YEAR ENDED MAY 31, 2020 Sales revenue $1,259,200 Cost of goods sold 716,700 Gross profit 542,500 Expenses Salaries and wages expense 253,400 Interest expense 74,800 Depreciation expense 26,600 Other expenses 8,200 Total expenses 363,000 Operating income 179,500 Income tax expense 43,100 Net income $136,400 The following is additional information concerning Blossom’s transactions during the year ended May 31, 2020. 1. All sales during the year were made on account. 2. All merchandise was purchased on account, comprising the total accounts payable account. 3. Plant assets costing $89,400 were purchased by paying $20,400 in cash and issuing 6,900 shares of stock. 4. The “other expenses” are related to prepaid items. 5. All income taxes incurred during the year were paid during the year. 6. In order to supplement its cash, Blossom issued 2,100 shares of common stock at par value. 7. Cash dividends of $118,400 were declared and paid at the end of the fiscal year. Prepare a statement of cash flows for Blossom Company for the year ended May 31, 2020, using the direct method. (A reconciliation of net income to net cash provided is not required.) (Show amounts in the investing and financing sections that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Question

100%

BLOSSOM COMPANY COMPARATIVE BALANCE SHEET AS OF MAY 31
	2020	2019
Current assets
Cash	$28,000	$20,200
Accounts receivable	74,900	58,500
Inventory	220,400	247,500
Prepaid expenses	9,000	7,000
Total current assets	332,300	333,200

Plant assets
Plant assets	594,000	504,600
Less: Accumulated depreciation—plant assets	151,500	124,900
Net plant assets	442,500	379,700
Total assets	$774,800	$712,900

Current liabilities
Accounts payable	$121,800	$114,600
Salaries and wages payable	46,800	71,900
Interest payable	26,800	25,000
Total current liabilities	195,400	211,500

Long-term debt
Bonds payable	70,000	100,000
Total liabilities	265,400	311,500

Stockholders’ equity
Common stock, $10 par	370,000	280,000
Retained earnings	139,400	121,400
Total stockholders’ equity	509,400	401,400
Total liabilities and stockholders’ equity	$774,800	$712,900

BLOSSOM COMPANY INCOME STATEMENT FOR THE YEAR ENDED MAY 31, 2020
Sales revenue		$1,259,200
Cost of goods sold		716,700
Gross profit		542,500

Expenses
Salaries and wages expense		253,400
Interest expense		74,800
Depreciation expense		26,600
Other expenses		8,200
Total expenses		363,000
Operating income		179,500
Income tax expense		43,100
Net income		$136,400

The following is additional information concerning Blossom’s transactions during the year ended May 31, 2020.

1.		All sales during the year were made on account.
2.		All merchandise was purchased on account, comprising the total accounts payable account.
3.		Plant assets costing $89,400 were purchased by paying $20,400 in cash and issuing 6,900 shares of stock.
4.		The “other expenses” are related to prepaid items.
5.		All income taxes incurred during the year were paid during the year.
6.		In order to supplement its cash, Blossom issued 2,100 shares of common stock at par value.
7.		Cash dividends of $118,400 were declared and paid at the end of the fiscal year.

Prepare a statement of cash flows for Blossom Company for the year ended May 31, 2020, using the direct method. (A reconciliation of net income to net cash provided is not required.) (Show amounts in the investing and financing sections that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.