The comparative balance sheet of Blessing Educational Supply at December 31, 2025, reported the following: 

Blessing Educational Supply’s transactions during 2025 included the following.

Requirements 

1. Prepare the statement of cash flows of Blessing Educational Supply for the year ended December 31, 2025. Use the indirect method to report cash flows from operating activities. 

2. Evaluate Blessing Educational Supply’s cash flows for the year. Mention all three categories of cash flows and give the reason for your evaluation. 

3. If Blessing Educational Supply plans similar activity for 2026, what is its expected free cash flow?

Transcribed Image Text:

Current Assets: Cash Accounts Receivable Merchandise Inventory Current Liabilities: Accounts Payable Accrued Liabilities 2025 $ 89,600 14,500 62,800 30,100 11,100 2024 $ 24,500 21,900 60,000 27,600 11,600