Serial Problem 2 - Question 5

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, 2022
Computer services revenue		$ 25,307
Net sales		18,593
Total revenue		43,900
Cost of goods sold	$ 14,752
Depreciation expenseOffice equipment	400
Depreciation expenseComputer equipment	1,220
Wages expense	2,750
Insurance expense	535
Rent expense	1,875
Computer supplies expense	1,225
Advertising expense	550
Mileage expense	230
Repairs expenseComputer	880
Total expenses		24,417
Net income		$ 19,483

BUSINESS SOLUTIONS
Comparative Balance Sheets
	March 31, 2022	December 31, 2021
Assets
Cash	$ 79,797	$ 55,902
Accounts receivable	23,867	4,868
Inventory	654	0
Computer supplies	2,025	560
Prepaid insurance	1,040	1,615
Prepaid rent	745	745
Total current assets	108,128	63,690
Office equipment	7,800	7,800
Accumulated depreciationOffice equipment	(800)	(400)
Computer equipment	19,400	19,400
Accumulated depreciationComputer equipment	(2,440)	(1,220)
Total assets	$ 132,088	$ 89,270
Liabilities and Equity
Accounts payable	$ 0	$ 1,200
Wages payable	945	510
Unearned computer service revenue	0	2,500
Total current liabilities	945	4,210
Equity
Common stock	108,000	77,000
Retained earnings	23,143	8,060
Total liabilities and equity	$ 132,088	$ 89,270

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 $31,000 to the business in exchange for additional stock in the first quarter of 2022 and has received $4,400 in cash dividends. (Amounts to be deducted should be indicated with a minus sign.)