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, 2018 Computer services revenue Net sales Total revenue Cost of goods sold Depreciation expense-Office equipment Depreciation expense-Computer equipment Wages expense Insurance expense Rent expense Computer supplies expense Advertising expense Mileage expense Repairs expense-Computer Total expenses Net inco $25,007 17,893 42,900 3 1 $14,552 390 1,210 2,450 465 1,875 1,265 550 280 920 2 1 23,957 $18,943 2 2 1 me BUSINESS SOLUTIONS Comparative Balance Sheets December 31, 2017, and March 31, 2018 Mar. 31, Dec. 31, 2018 2017 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 $ 78,447 $59,392 5,068 24,167 664 2,085 1,090 765 107,218 7,200 530 1,605 765 67,360 7,200 (780) (390) 19,800 2,420 (1.210 19,800 $131,018 $92,760 Liabilities and Equity Accounts payable Wages payable Unearned computer service revenue Total current liabilities Equity Common stock Retained earnings 0 1,140 560 2.400 4,100 915 81,000 22,103_ 71660 $131,018 $92,760 108,000 Total liabilities and equity Required Prepare a statement of cash flows for Business Solutions using the indirect method for the three months ended March 31, 2018. Owner Santana Rey contributed $27,000 to the business in exchange for additional stock in the first quarter of 2018 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, 2018 Cash flows from operating activities $18,943 Net income Adjustments to reconcile net income to net cash provided by operating activities Depreciation expense Office equipment Depreciation expense-Compter equipme Increase in accounts receivable Increase in inventory Increase in computer supplies Decrease in prepaid insurance Decrease in accounts payable Increase in wages payable Decrease in unearned computer service revenue ent Net cash provided by operating activities Cash flows from investing activities Net cash used in investing activities $ 18,943 Cash flows from financing activities Cash received from stock issuance Cash paid for dividends $ 18,943 increase in cash Cash balance at December 31, 2017 Cash balance at March 31, 2018 $ 18,943
