Befuddled Corporation collected the following information on inflows and outflows for 2019:
Inflows
Cash collections from sales .................................. $956,500
Proceeds from disposal of equipment ......................... 11,250
Proceeds received from issuance of notes payable .......... 30,000
Outflows
Cash payments for cost of goods sold ............................. $534,900
Cash payments for operating expenses .............................. 193,200
Cash payments for interest ............................................. 36,400
Cash payments for income taxes ...................................... 21,300
Cash payments for purchases of equipment ........................ 217,150
Repayment of short-term notes payable ............................. 20,000
Payment of cash dividends ........................................... 38,000
Befuddled had a cash balance of $89,200 on 1/1/2019.
Required:
1. Prepare a statement of cash flows using the direct method to determine net cash flow from operating activities.
2. What can you conclude by examining the patterns in Befuddled's cash flows?