90.2K

Verified Solution

Link Copied!

Santana Rey, owner of Business Solutions, decides to prepare a statement of cash flows for her business using the following financial data. BUSINESS SOLUTIONS Income Statement For Three Months Ended March 31, 2020 Computer services revenue $ 24,807 Net sales 18,393 Total revenue 43,200 Cost of goods sold $14,552 Depreciation expense-Office equipment 370 Depreciation expense-Computer equipment 1,170 Wages expense 2,550 Insurance expense 535 Rent expense 2,175 Computer supplies expense 1,245 Advertising expense 580 Mileage expense 270 Repairs expense-Computer 890 Total expenses 24,337 Net income $18,863 Dec. 31, 2019 $61,502 4,768 BUSINESS SOLUTIONS Comparative Balance Sheets December 31, 2019, and March 31, 2020 Mar. 31, 2020 Assets Cash $ 79,607 Accounts receivable 23,767 Inventory 694 Computer supplies 2,025 Prepaid insurance 1,070 Prepaid rent 735 Total current assets 107,898 Office equipment 7,700 Accumulated depreciation-office equipment (740) Computer equipment 19,000 Accumulated depreciation-Computer equipment (2,340) Total assets $131,518 Liabilities and Equity Accounts payable $ @ Wages payable 895 Unearned computer service revenue Total current liabilities 895 Equity Common stock 108,000 Retained earnings 22,623 Total liabilities and equity $131,518 570 1,655 735 69,230 7,700 (370) 19,000 (1,170) $94, 390 $ 1,130 500 2,500 4,130 82,000 8,260 $94, 390 Required: Prepare a statement of cash flows for Business Solutions using the indirect method for the three months ended March 31, 2020. Owner Santana Rey contributed $26,000 to the business in exchange for additional stock in the first quarter of 2020 and has received $4,500 in cash dividends. (Amounts to be deducted should be indicated with a minus sign.) BUSINESS SOLUTIONS Statement of Cash Flows (Indirect) For Quarter Ended March 31, 2020 Cash flows from operating activities Adjustments to reconcile net income to net cash provided by operating activities S 0 Cash flows from investing activities Net cash used in investing activities Cash flows from financing activities 0 S 0 Cash balance at December 31, 2019 Cash balance at March 31, 2020 S 0

Answer & Explanation Solved by verified expert

See Answer