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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
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 | $ | 24,307 | ||||
Net sales | 18,593 | |||||
Total revenue | 42,900 | |||||
Cost of goods sold | $ | 14,652 | ||||
Depreciation expenseOffice equipment | 400 | |||||
Depreciation expenseComputer equipment | 1,240 | |||||
Wages expense | 3,150 | |||||
Insurance expense | 535 | |||||
Rent expense | 1,875 | |||||
Computer supplies expense | 1,255 | |||||
Advertising expense | 580 | |||||
Mileage expense | 300 | |||||
Repairs expenseComputer | 870 | |||||
Total expenses | 24,857 | |||||
Net income | $ | 18,043 | ||||
BUSINESS SOLUTIONS | |||||||||||
Comparative Balance Sheets | |||||||||||
December 31, 2019, and March 31, 2020 | |||||||||||
Mar. 31, 2020 | Dec. 31, 2019 | ||||||||||
Assets | |||||||||||
Cash | $ | 83,357 | $ | 58,322 | |||||||
Accounts receivable | 23,567 | 5,068 | |||||||||
Inventory | 654 | 0 | |||||||||
Computer supplies | 2,045 | 550 | |||||||||
Prepaid insurance | 1,020 | 1,585 | |||||||||
Prepaid rent | 815 | 815 | |||||||||
Total current assets | 111,458 | 66,340 | |||||||||
Office equipment | 7,300 | 7,300 | |||||||||
Accumulated depreciationOffice equipment | (800 | ) | (400 | ) | |||||||
Computer equipment | 19,600 | 19,600 | |||||||||
Accumulated depreciationComputer equipment | (2,480 | ) | (1,240 | ) | |||||||
Total assets | $ | 135,078 | $ | 91,600 | |||||||
Liabilities and Equity | |||||||||||
Accounts payable | $ | 0 | $ | 1,160 | |||||||
Wages payable | 975 | 580 | |||||||||
Unearned computer service revenue | 0 | 1,700 | |||||||||
Total current liabilities | 975 | 3,440 | |||||||||
Equity | |||||||||||
Common stock | 112,000 | 80,000 | |||||||||
Retained earnings | 22,103 | 8,160 | |||||||||
Total liabilities and equity | $ | 135,078 | $ | 91,600 | |||||||
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 $32,000 to the business in exchange for additional stock in the first quarter of 2020 and has received $4,100 in cash dividends. (Amounts to be deducted should be indicated with a minus sign.)
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