Question

The following summary transactions occurred during 2018 for Bluebonnet Bakers:

Cash Received from:
Customers	$	530,000
Interest on note receivable		5,500
Principal on note receivable		58,000
Sale of investments		38,000
Proceeds from note payable		195,000
Cash Paid for:
Purchase of inventory		255,000
Interest on note payable		9,500
Purchase of equipment		97,000
Salaries to employees		102,000
Principal on note payable		44,000
Payment of dividends to shareholders		39,000

The balance of cash and cash equivalents at the beginning of 2018 was $30,000.

Required:
Prepare a statement of cash flows for 2018 for Bluebonnet Bakers. Use the direct method for reporting operating activities. (Amounts to be deducted should be indicated with a minus sign.)
  

	BLUEBONNET BAKERS Statement of Cash Flows For the Year Ended December 31, 2018    $0 0 0 0 $0

Answer 1

  

	BLUEBONNET BAKERS Statement of Cash Flows

I. Cash flows from operating activities
Cash Received from customers	530,000
Interest on note receivable	5,500
Purchase of inventory	- 255,000
Interest on note payable	- 9,500
Salaries to employees	- 102,000
Net cash flows from operating activities		169,000
II. Cash flows from investing activities
Principal on note receivable	58,000
Sale of investments	38,000
Purchase of equipment	- 97,000
Net Cash flows used in investing activities		- 1,000
III. Cash flows from Financing activities
Proceeds from note payable	195,000
Principal on note payable	- 44,000
Payment of dividends to shareholders	- 39,000
Cash flows from Financing activities		112,000
Net increase in cash (I + II + III)		280,000
cash and cash equivalents at the beginning		30,000
cash and cash equivalents at the end		310,000