The following summary transactions occurred during 2018 for Bluebonnet Bakers: T

Question

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

Explanation / Answer

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

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