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.

Santana Rey, owner of Business Solutions, decides to prepare a statement of cash flows for her business.

Santana Rey, owner of Business Solutions, decides to prepare a statement of cash flows for her business BUSINESS SOLUTIONS Income Statement For Three Months Ended March 31, 2012 Computer services revenue Net sales $25,307 18,293 43,600 Total revenue Cost of goods sold Depreciation expense-Office $14,652 310 1.210 3,050 505 1,875 1,245 570 310 910 ice equipment xpense Computer equipment preciation expense-Computer Wages expense nsurance expense Rent expense Computer supplies expense Advertising expense Mileage expense Repairs expense-Computer Total expenses 24,637 Net income $18,963 BUSINESS SOLUTIONS Comparative Balance Sheets December 31, 2011, and March 31, 2012 2012 2011 Assets Cash Accounts receivable Merchandise inventory Computer supplies Prepaid insurance Prepaid rent Office equipment Accumulated depreciation-Office equipment Computer equipment Accumulated depreciation Computer equipment $ 76,797 $56,042 4.868 24,367 624 2,025 1,030 825 7,800 (620) 19,800 550 1,605 825 7,800 (310) 19,800 (2,420) (1.210) Total assets $130,228 $89,970 Liabilities and Equity Accounts payable Wages payable Unearned computer service revenue Common stock Retained earnings 0 1,110 600 2,300 78,000 7,960 905 107,000 22,323 Total liabilities and equity $130,228 $89,970

Explanation / Answer

DESCRIPTION AMOUNT AMOUNT NET INCOME $18963 ADJUSTMENTS- DEPERICIATION ON OFFICE EQUIPEMENT $310 DEPERICIATION ON COMPUTER EQUIPEMENT $1210 LESS-INCEREASE IN ACCOUNTS RECEIVABLE ($19499) LESS-INCEREASE IN MERCHANDISE INVENTORY ($624) LESS-INCEREASE IN COMPUTER SUPPLIES ($1475) ADD-DECEREASE IN PREPAID INSURANCE $575 LESS DECEREASE IN ACCOUNTS PAYABLE ($1110) ADD-INCEREASE IN WAGES PAYABLE $305 LESS - DECEREASE IN UNEARNNED SERVICE REVENUE ($2300) NET CASH USED IN OPERATING ACTIVITY ($22608) ($3645) NET CASH FLOW FROM INVESTING ACTIVITY NIL CASH FLOW FROM FINANCING ACTIVITY ISSUE OF COMMON STOCK $29000 LESS CASH DIVIDEND PAID ($4600) NET CASH FLOW FROM FINANCING ACTIVITY $24400 CASH FLOW FOR THE YEAR ENDED 31 MARCH 2012 $20755 CASH BALANCE AT 31 MARCH 2011 $56042 CASH BALANCE AT 31 MARCH 2012 $76797

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