Question

The following summary transactions occurred during 2018 for Bluebonnet Bakers:

Cash Received from:
Customers	$	510,000
Interest on note receivable		12,500
Principal on note receivable		56,000
Sale of investments		36,000
Proceeds from note payable		185,000
Cash Paid for:
Purchase of inventory		245,000
Interest on note payable		8,500
Purchase of equipment		95,000
Salaries to employees		100,000
Principal on note payable		42,000
Payment of dividends to shareholders		37,000

The balance of cash and cash equivalents at the beginning of 2018 was $28,000.

Required:
Prepare the statement of cash flows assuming that Bluebonnet prepares its financial statements according to International Financial Reporting Standards. Where IFRS allows flexibility, use the classification used most often in IFRS financial statements

Answer 1

CASH FLOW STATEMENT OF BLUEBONNET BAKERS
FOR THE YEAR ENDING 2018 DIRECT METHOD
PARTICULARS					$	Total $
CASH FLOW FROM OPERATING ACTIVITIES
Cash collected from customers					510000
Interest on note receivable					12500
Purchase of inventory					-245000
Interest on note payable					-8500
Payment of salaries					-100000
Net Cash flows from operating activities						169000
CASH FLOWS FROM INVESTING ACTIVITIES
Principle on note receivable					56000
Sale of investments					36000
Purchase of equipments					-95000
Net cash flows from investing activities						-3000
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from note payable					185000
Payment of note payable					-42000
Payment of dividend					-37000
Net cash flows from financing activites						106000
Net increase (decrease) in cash						272000
Cash and cash equivalents in the beginning						28000
Cash and cash equivalents at the end						300000