4/19/24, 11:40 AM Question 1 of 11 - ACC220 Term Test #3 W24

ACC220 Term Test #3 W24 01 : 29 : 46

Question 1 of 11 - / 25

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The financial statements of Blossom Ltd., a private company reporting under ASPE, follow:

BLOSSOM LTD.
Balance Sheet
December 31

Assets 2024 2023

Cash $11,340 $12,600

Short-term notes receivable 17,620 28,960

Accounts receivable 35,280 17,640

Inventory 36,540 31,500

Property, plant, and equipment 92,000 98,300

Accumulated depreciation (37,800) (30,240)

Total assets $154,980 $158,760

Liabilities and Shareholders’ Equity

Accounts payable $31,500 $54,180

Income tax payable 3,780 25,200

Notes payable 18,900 12,600

Common shares 31,500 31,500

Retained earnings 69,300 35,280

Total liabilities and shareholders’ equity $154,980 $158,760

BLOSSOM LTD.
Income Statement
Year Ended December 31, 2024

Sales $360,360

Cost of goods sold 244,440

Gross profit 115,920

Operating expenses 47,880

Profit from operations 68,040

Other revenues and expenses

Interest revenue $(1,260)

Loss on sale of equipment 2,520

Interest expense 2,520 3,780

Profit before income tax 64,260

Income tax expense 18,900

Profit for the year $45,360

Additional information:

1. Short-term notes receivable are loans to other companies. During the year, the company collected the balance
outstanding at December 31, 2023, and made new loans in the amount of $17,620.

Equipment was sold during the year. This equipment cost $18,900 originally and had a carrying amount of $12,600 at the
2.
time of sale.

3. Equipment costing $12,600 was purchased in exchange for a $12,600 note payable.

4. Depreciation expense is included in operating expenses.

5. Accounts receivable are from the sale of merchandise on credit.

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4/19/24, 11:40 AM Question 1 of 11 - ACC220 Term Test #3 W24
6. Accounts payable relate to the purchase of merchandise on credit.
ACC220 Term Test #3 W24 01 : 29 : 46

Question
Prepare a1cash
of 11 - /either
flow statement for the year using the indirect method. (Show amounts that decrease cash flow with 25 a - sign e.g.
-15,000 or in parenthesis e.g. (15,000).)

BLOSSOM LTD.
Cash Flow Statement

Adjustments
to reconcile
profit to

Note: Equipment costing $ was purchased by issuing a note payable.

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