The following are Blossom Corp.’s comparative balance sheet accounts at December 31, 2020 and 2019, with a column showing the increase (decrease) from 2019 to 2020.COMPARATIVE BALANCE SHEETS 2020 2019 Increase(Decrease)Cash $814,600 $706,000 $108,600 Accounts receivable 1,129,100 1,176,600 (47,500)Inventory 1,861,900 1,719,500 142,400 Property, plant, and equipment 3,335,800 2,940,300 395,500 Accumulated depreciation (1,159,600) (1,046,100) (113,500) Investment in Myers Co. 313,100 277,300 35,800 Loan receivable 249,200 — 249,200 Total assets $6,544,100 $5,773,600 $770,500 Accounts payable $1,013,700 $946,000 $67,700 Income taxes payable 29,900 50,000 (20,100)Dividends payable 80,200 99,800 (19,600)Lease liabililty 455,900 — 455,900 Common stock, $1 par 500,000 500,000 — Paid-in capital in excess of par—common stock 1,502,100 1,502,100 — Retained earnings 2,962,300 2,675,700 286,600 Total liabilities and stockholders’ equity $6,544,100 $5,773,600 $770,500 Additional information:1. On December 31, 2019, Blossom acquired 25% of Myers Co.’s common stock for $277,300. On that date, the carrying value of Myers’s assets and liabilities, which approximated their fair values, was $1,109,200. Myers reported income of $143,200 for the year ended December 31, 2020. No dividend was paid on Myers’s common stock during the year.2. During 2020, Blossom loaned $355,300 to TLC Co., an unrelated company. TLC made the first semiannual principal repayment of $106,100, plus interest at 10%, on December 31, 2020.3. On January 2, 2020, Blossom sold equipment costing $60,400, with a carrying amount of $38,000, for $40,200 cash.4. On December 31, 2020, Blossom entered into a capital lease for an office building. The present value of the annual rental payments is $455,900, which equals the fair value of the building. Blossom made the first rental payment of $60,200 when due on January 2, 2021.5. Net income for 2020 was $366,800.6. Blossom declared and paid the following cash dividends for 2020 and 2019. 2020 2019Declared December 15, 2020 December 15, 2019Paid February 28, 2021 February 28, 2020Amount $80,200 $99,800Prepare a statement of cash flows for Blossom Corp. for the year ended December 31, 2020, 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 CORP.Statement of Cash FlowsAdjustments to reconcile net income to%24%24 %24%24

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Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter11: The Statement Of Cash Flows

Section: Chapter Questions

Problem 10MCQ

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The following are Blossom Corp.’s comparative balance sheet accounts at December 31, 2020 and 2019, with a column showing the increase (decrease) from 2019 to 2020.

COMPARATIVE BALANCE SHEETS
	2020	2019		Increase (Decrease)
Cash	$814,600		$706,000		$108,600
Accounts receivable	1,129,100		1,176,600		(47,500	)
Inventory	1,861,900		1,719,500		142,400
Property, plant, and equipment	3,335,800		2,940,300		395,500
Accumulated depreciation	(1,159,600)		(1,046,100)		(113,500)
Investment in Myers Co.	313,100		277,300		35,800
Loan receivable	249,200		—		249,200
Total assets	$6,544,100		$5,773,600		$770,500

Accounts payable	$1,013,700		$946,000		$67,700
Income taxes payable	29,900		50,000		(20,100	)
Dividends payable	80,200		99,800		(19,600	)
Lease liabililty	455,900		—		455,900
Common stock, $1 par	500,000		500,000		—
Paid-in capital in excess of par—common stock	1,502,100		1,502,100		—
Retained earnings	2,962,300		2,675,700		286,600
Total liabilities and stockholders’ equity	$6,544,100		$5,773,600		$770,500

Additional information:

1.		On December 31, 2019, Blossom acquired 25% of Myers Co.’s common stock for $277,300. On that date, the carrying value of Myers’s assets and liabilities, which approximated their fair values, was $1,109,200. Myers reported income of $143,200 for the year ended December 31, 2020. No dividend was paid on Myers’s common stock during the year.
2.		During 2020, Blossom loaned $355,300 to TLC Co., an unrelated company. TLC made the first semiannual principal repayment of $106,100, plus interest at 10%, on December 31, 2020.
3.		On January 2, 2020, Blossom sold equipment costing $60,400, with a carrying amount of $38,000, for $40,200 cash.
4.		On December 31, 2020, Blossom entered into a capital lease for an office building. The present value of the annual rental payments is $455,900, which equals the fair value of the building. Blossom made the first rental payment of $60,200 when due on January 2, 2021.
5.		Net income for 2020 was $366,800.
6.		Blossom declared and paid the following cash dividends for 2020 and 2019.

	2020	2019
Declared	December 15, 2020	December 15, 2019
Paid	February 28, 2021	February 28, 2020
Amount	$80,200	$99,800

Prepare a statement of cash flows for Blossom Corp. for the year ended December 31, 2020, 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 CORP.
Statement of Cash Flows
Adjustments to reconcile net income to
%24
%24

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