Homework SourseThe following summary transactions occurred during 2018 for
The following summary transactions occurred during 2018 for Bluebonnet Bakers:
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
| 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 | ||
Solution
FOR THE YEAR ENDING 2018
DIRECT METHOD
| 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 |
