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Serial Problem Business Solutions (Indirect) LO P2, P3

Santana Rey, the 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				$	25,307
Net sales					18,693
Total revenue					44,000
Cost of goods sold	$	14,052
Depreciation expenseOffice equipment		400
Depreciation expenseComputer 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 expenseComputer		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 depreciationOffice equipment			(800	)					(400	)
Computer equipment			20,000						20,000
Accumulated depreciationComputer 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.)

	BUSINESS SOLUTIONS Statement of Cash Flows (Indirect) For Quarter Ended March 31, 2020 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, 2019 Cash balance at March 31, 2020 $0

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