Santana Rey, owner of Business Solutions, decides to prepare a statement of cash flows for her business using the following fina
ncial data.
BUSINESS SOLUTIONS
Income Statement
For Three Months Ended March 31, 2020
Computer services revenue $ 25,307
Net sales 18,693
Total revenue 44,000
Cost of goods sold $ 14,052
Depreciation expense—Office equipment 400
Depreciation expense—Computer equipment 1,250
Wages expense 3,250
Insurance expense 555
Rent expense 2,475
Computer supplies expense 1,305
Advertising expense 600
Mileage expense 320
Repairs expense—Computer 960
Total expenses 25,167
Net income $ 18,833
BUSINESS SOLUTIONS
Comparative Balance Sheets
December 31, 2019, and March 31, 2020
Mar. 31, 2020 Dec. 31, 2019
Assets
Cash $ 68,057 $ 48,372
Accounts receivable 22,867 5,668
Inventory 704 0
Computer supplies 2,005 580
Prepaid Insurance 1,110 1,665
Prepaid rent 825 825
Total current assets 95,568 57,110
Office equipment 8,000 8,000
Accumulated depreciation—Office equipment (800 ) (400 )
Computer equipment 20,000 20,000
Accumulated depreciation—Computer equipment (2,500 ) (1,250 )
Total assets $ 120,268 $ 83,460
Liabilities and Equity
Accounts payable $ 0 $ 1,100
Wages payable 875 500
Unearned computer service revenue 0 1,500
Total current liabilities 875 3,100
Equity
Common stock 98,000 73,000
Retained earnings 21,393 7,360
Total liabilities and equity $ 120,268 $ 83,460
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 $25,000 to the business in exchange for additional stock in the first quarter of 2020 and has received $4,800 in cash dividends. (Amounts to be deducted should be indicated with a minus sign.)
