Yogurt Plus, a restaurant, collected the following information on inflows and outflows for 2019:
Inflows
Sales (all for cash) .................................................. $334,500
Cash received from sale of common stock .......................... 72,000
Proceeds from issuance of long-term notes payable .............. 50,000
Proceeds from sale of used restaurant furniture .................... 11,300
Proceeds from issuance of short-term note payable ............... 15,000
Notes payable issued in exchange for kitchen equipment ........ 30,000
Outflows
Cash payments made for merchandise sold ............................ $176,450
Cash payments for operating expenses ................................... 115,210
Cash payments for interest .................................................. 24,600
Cash payments for income taxes ............................................. 9,475
Purchase of restaurant furniture for cash ................................ 108,800
Principal payment on mortgage ............................................ 35,000
Payment of dividends ........................................................ 10,000
Cost of kitchen equipment acquired in exchange for note payable .... 30,000
Yogurt Plus had a cash balance of $21,800 at 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 Yogurt Plus's cash flows?