Question

The following summary transactions occurred during 2018 for Bluebonnet Bakers: Cash Received from: Customers $ 380,000 Interest on note receivable 6,000 Principal on note receivable 50,000 Sale of investments 30,000 Proceeds from note payable 100,000 Cash Paid for: Purchase of inventory 160,000 Interest on note payable 5,000 Purchase of equipment 85,000 Salaries to employees 90,000 Principal on note payable 25,000 Payment of dividends to shareholders 20,000 The balance of cash and cash equivalents at the beginning of 2018 was $17,000. Required: Prepare a statement of cash flows for 2018 for Bluebonnet Bakers. Use the direct method for reporting operating activities.

Answer 1

BLUEBONNET BAKERS
Statement of Cash Flows (Direct Method)
For the Year ended Dec 31, 2018
Cash Flow From opearting Activities
Cash Received from Customers	380,000.00
Cash Received from Interest on Notes Receivable	6,000.00
Cash Paid For Inventory	(160,000.00)
Cash Paid For Interest on Notes Payable	(5,000.00)
Cash Paid For Salaries	(90,000.00)
Net Cash Flow provided (used) from Operating Activities		131,000.00
Cash flow from Investing Activities
Cash Received from Sale of Investments	30,000.00
Cash Received from Notes Receivable	50,000.00
Cash Paid for Purchase of Equipment	(85,000.00)
Net Cash Flow provided (used) from Investing activities		(5,000.00)
Cash Flow from Financing Activities
Proceeds from Note Payable	100,000.00
Cash Paid for Notes Payable	(25,000.00)
Cash Paid for Dividends	(20,000.00)
Cash Flow from Financing Activities		55,000.00
Net Increase / (Decrease) in Cash		181,000.00
Cash Beginning Balance - Dec 31, 2017		17,000.00
Cash Ending Balance - Dec 31, 2018		198,000.00