Question

Blossom Inc., is a private company reporting under ASPE. The following selected account balances were reported in Blossom Inc.’s financial statements at year end:

Additional information:
1.		Purchased $70,000 of equipment for $8,000 cash and a note payable for the remainder.
2.		Equipment was also sold during the year.
3.		Sold a building that originally cost $45,000.
4.		Used cash to purchase land and a building.
5.		Mortgage payments and notes payable payments included interest and principal amounts.
6.		Common shares were issued for cash.

		2017		2016
Cash		$ 18,000		$ 8,000
Buildings		825,000		725,000
Equipment		387,000		337,000
Land		85,000		45,000
Accumulated depreciation—buildings		300,000		282,500
Accumulated depreciation—equipment		115,000		86,000
Dividends payable		5,750		2,200
Mortgage payable		541,000		581,000
Notes payable		335,000		304,000
Common shares: 5,300 shares in 2017; 3,900 in 2016		534,000		405,000
Retained earnings		191,000		92,000
Cash dividends declared		20,000		6,000
Depreciation expense—buildings		22,000		39,500
Depreciation expense—equipment		47,005		25,150
Gain on sale of equipment		800		0
Loss on sale of building		7,500		0
Interest expense		47,250		43,150
A) Determine the amount of any cash inflows or outflows related to investing activities in 2017.

Answer 1

Answer A) Cash inflows or outflows related to investing activities in 2017

Cash Inflow/outflow related to Investing Activities
Purchase of building	$ (145,000)
Sale of building	$      33,000
Purchase of Equipment	$      (8,000)
Sale of Equipment	$        2,795
Purchase of Land	$    (40,000)
Net outflow in Investing Activities		$       (157,205)

Above inflows and outflows are calculated by preparing following T accounts

Building Account
Beg. Balance	$    725,000
		$       4,500	Accumulated Dep.
Cash(bala figure)	$    145,000		(Depreciation on sold)
		$       7,500	Loss on sale of building
		$     33,000	Cash(Sale)
End Balance	$    825,000
Equipment Account
Beg. Balance	$    337,000
Cash	$        8,000	$     18,005	Accumulated Dep.
Note Payable	$      62,000		(Depreciation on sold)
Gain on sale of Equipment	$            800	$       2,795	Cash(Sale bala. figure)
End Balance	$    387,000
Land Account
Beg. Balance	$      45,000
Cash(Purchase bala. figure)	$      40,000
End Balance	$      85,000

Accumulated Depreciation -Building
		$        282,500	Beg. Balance
Building	$    4,500	$          22,000	Depreciation expense
(Depreciation on sold)
(bala figure)
		$        300,000	End Balance
Accumulated Depreciation -Equipment
		$          86,000	Beg. Balance
Equipment	$ 18,005	$          47,005	Depreciation expense
(Depreciation on sold)
(bala. figure)
		$        115,000	End Balance

KINDLY HIT THUMBS UP IF SATISFIED IT WILL BE HIGHLY APPRECIATED

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