Santana Rey, owner of Business Solutions, decides to prepare a statement of cash flows for her business using the following financial data. $ 24,907 18,593 43,500 BUSINESS SOLUTIONS Income Statement For Three Months Ended March 31, 2022 Computer services revenue Net sales Total revenue Cost of goods sold $ 14,552 Depreciation expense-Office equipment 360 Depreciation expense-Computer equipment 1,170 Wages expense 3,050 Insurance expense 455 Rent expense 1,675 Computer supplies expense 1,285 Advertising expense 540 Mileage expense 260 Repairs expense-Computer 880 Total expenses Net income 24,227 $ 19, 273 BUSINESS SOLUTIONS Comparative Balance Sheets March 31, 2022 December 31, 2021 Assets Cash Accounts receivable Inventory Computer supplies Prepaid insurance Prepaid rent Total current assets Office equipment Accumulated depreciation-office equipment Computer equipment Accumulated depreciation-Computer equipment Total assets Liabilities and Equity Accounts payable Wages payable Unearned computer service revenue Total current liabilities Equity Common stock Retained earnings Total liabilities and equity $ 80,137 23, 867 614 2,025 1,050 765 108,458 7,900 (720) 19,100 (2,340) $ 132,398 $ 58,702 4,768 0 510 1,595 765 66,340 7,900 (360) 19,100 (1,170) $ 91,810 $ 965 0 965 $ 1,120 530 2,000 3,650 108,000 23,433 $ 132,398 80,000 8,160 $ 91,810 Required: Prepare a statement of cash flows for Business Solutions using the indirect method for the three months ended March 31, 2022. Owner Santana Rey contributed $28,000 to the business in exchange for additional stock in the first quarter of 2022 and has received $4,000 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, 2022 Cash flows from operating activities Net income $ 19,273 Adjustments to reconcile net income to net cash provided by operating activities Income statement items not affecting cash Depreciation expense-Office equipment Depreciation expense-Computer equipment Changes in current assets and current liabilities 360 1,170 Increase in accounts receivable (19,099) (614) Increase in inventory Increase in computer supplies Decrease in prepaid insurance (19,515) 545 (2,000) Decrease in unearned computer service revenue Decrease in accounts payable Increase in wages payable (1,120) 435 $ (20,565) Net cash provided by operating activities Cash flows from investing activities Net cash used in investing activities Cash flows from financing activities 0 (20,565) Cash balance at December 31, 2021 Cash balance at March 31, 2022 $ (20,565)
