Question

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				$	24,607
Net sales					18,493
Total revenue					43,100
Cost of goods sold	$	14,552
Depreciation expense—Office equipment		390
Depreciation expense—Computer equipment		1,190
Wages expense		2,650
Insurance expense		525
Rent expense		1,575
Computer supplies expense		1,255
Advertising expense		560
Mileage expense		260
Repairs expense—Computer		950
Total expenses					23,907
Net income				$	19,193

BUSINESS SOLUTIONS
Comparative Balance Sheets
December 31, 2017, and March 31, 2018
	Mar. 31, 2018				Dec. 31, 2017
Assets
Cash	$	74,547			$	53,022
Accounts receivable		23,967				5,268
Inventory		634				0
Computer supplies		2,005				560
Prepaid insurance		1,030				1,565
Prepaid rent		745				745
Total current assets		102,928				61,160
Office equipment		8,000				8,000
Accumulated depreciation—Office equipment		(780	)			(390	)
Computer equipment		19,900				19,900
Accumulated depreciation—Computer equipment		(2,380	)			(1,190	)
Total assets	$	127,668			$	87,480
Liabilities and Equity
Accounts payable	$	0			$	1,180
Wages payable		915				540
Unearned computer service revenue		0				2,100
Total current liabilities		915				3,820
Equity
Common stock		104,000				76,000
Retained earnings		22,753				7,660
Total liabilities and equity	$	127,668			$	87,480
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 $28,000 to the business in exchange for additional stock in the first quarter of 2018 and has received $4,100 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 Adjustments to reconcile net income to net cash provided by operating activities $0 Cash flows from investing activities Net cash used in investing activities Cash flows from financing activities 0 $0 Cash balance at December 31, 2017 Cash balance at March 31, 2018 $0

Answer 1