Solution-Prepare a statement of cash flows for success

Prepare a statement of cash flows for success systems

Assignment Help Financial Accounting

Reference no: EM131265312

Serial Problem Success Systems (Indirect) LO P1, P2, P3

Adria Lopez, owner of Success Systems, decides to prepare a statement of cash flows for her business. (Although the serial problem allowed for various ownership changes in earlier chapters, we will prepare the statement of cash flows using the following financial data.)

SUCCESS SYSTEMS
Income Statement
For Three Months Ended March 31, 2014
Computer services revenue		$ 25,207
Net sales		18,293
Total revenue		43,500
Cost of goods sold	$ 14,352
Depreciation expense-Office equipment	320
Depreciation expense-Computer equipment	1,220
Wages expense	3,150
Insurance expense	525
Rent expense	1,975
Computer supplies expense	1,265
Advertising expense	560
Mileage expense	320
Repairs expense-Computer	930
Total expenses		24,617
Net income		$ 18,883

SUCCESS SYSTEMS
Comparative Balance Sheets
December 31, 2013, and March 31, 2014
	2014	2013
Assets
Cash	$ 84,987	$ 60,852
Accounts receivable	24,067	5,068
Merchandise inventory	614	0
Computer supplies	2,075	550
Prepaid insurance	1,030	1,605
Prepaid rent	785	785
Office equipment	7,500	7,500
Accumulated depreciation-Office equipment	(640)	(320)
Computer equipment	19,600	19,600
Accumulated depreciation-Computer equipment	(2,440)	(1,220)
Total assets	$ 137,578	$ 94,420
Liabilities and Equity
Accounts payable	$ 0	$ 1,190
Wages payable	935	570
Unearned computer service revenue	0	1,700
Common stock	114,000	83,000
Retained earnings	22,643	7,960
Total liabilities and equity	$ 137,578	$ 94,420

Required:

Prepare a statement of cash flows for Success Systems using the indirect method for the three months ended March 31, 2014. Recall that the owner Adria Lopez contributed $31,000 to the business in exchange for additional stock in the first quarter of 2014 and has received $4,200 in cash dividends. (Amounts to be deducted should be indicated with a minus sign.)

Reference no: EM131265312

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Prepare a statement of cash flows for success systems

Reference no: EM131265312

Reference no: EM131265312

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