Santana Rey, owner of Business Solutions, decides to prepare a statement of cash

Question

Santana Rey, owner of Business Solutions, 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.)

Prepare a statement of cash flows for Business Solutions using the indirect method for the three months ended March 31, 2016. Recall that the owner Santana Rey contributed $33,000 to the business in exchange for additional stock in the first quarter of 2016 and has received $4,700 in cash dividends.(Amounts to be deducted should be indicated with a minus sign.)

Santana Rey, owner of Business Solutions, 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.)

Explanation / Answer

Business Solutions Statement of Cash Flows For the Quater ending March 31, 2016 Cash Flow from opearating activities: Net Income            17,423 Add/(Less) non cash effects on operating activities Depreciation expenses - office Equipment                  350 Depreciation expenses - Computer Equipment              1,160 Increase in Accounts Receivables          (18,899) Increase in Inventory                (674) Increase in Computer Supplies            (1,495) Decreased in Prepaid Insurance                  545 Decrease in Accounts Payables            (1,140) Increase in Wages Payables                  365 Decrease in Unearned computer service revenue            (1,600)          (21,388) Net Cash provided by operating activities            (3,965) Cash flow from investing activities Net Cash provided by investing activities                     -   Cash flow from Financing activities Proceeds from issue of Stocks            33,000 Dividends Paid - Common Stock            (4,700) Net Cash provided by Financing activities            28,300 Net Increase in Cash            24,335 Cash Balance at Jan. 1, 2015            58,362 Cash Balance at Dec 31, 20X5            82,697

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