Bluebonnet Baker Case Study

Week 2 Assignment 2
ACC Intermediate Accounting I

E4-16
Bluebonnet Bakers
Statement of Cash Flows
For the Year Ended December 31, 2011
($ in thousands)

Cash Flows from Operating Activities Collections from customers $380 Interest on note receivable 6 Purchase of inventory (160) Interest on note payable (5) Salaries to employees (90)
Net cash flows from operating activities $131
Cash Flows from Investing Activities Principal on note receivable 50 Sale of investments 30 Purchase of equipment (85)
Net cash flows from investing activites (5)
Cash Flows from Financing Activities Proceeds from note payable 100 Principle on note payable (25) Payment of dividends to shareholders (20)
Net cash flows from financing activities 55
100,000 Installment receivable (2012 sale)……………..…….120,000
To record cash collection from installment sales

Deferred gross profit...................................... 71,000 Realized gross profit (2011 sale)………………..…... 35,000 Realized gross profit (2012 sale)…………………..... 36,000
To record cash collection from installment sales
(350,000-245,000=105,000) (105,000/350,000=30% gross profit)
E3-10
1. 2011 2012 2013 Contract Price 220 220 220 Construction costs: Actual incurred during year 40 80 50 Actual incurred prior years 0 40 120 Cumm actual to date 40 120 170 Est. remaining to complete 120 60 0 Total (act+est) 180 180 170 Total gross profit(cont-total costs) 40 40 50 Percentage of completion (act/total) 22% 6.7% 100% Gross profit earned to date 8.8 26.8 50 Gross profit rec in prior periods 0 (8.8) (26.8) Gross profit recognized currently $8.8 $18 $23.2

2. Revenue recognized: 2011: $220 x 22% $48.4 2012: $220 x 67% $147.4 Less: 2011 revenue (48.4) Revenue rec. in 2012 $99
3. Completed Contract Method: 2011 2012 2013 0 0 $50
4. 2011 2012 2013
Gross Profit 8.8 18 23.2
Cost 40 80 50
Revenue 48.8 98