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 using the following financial BUSINESS SOLUTIONS Income Statement For Three Months Ended March 31, 2018 Computer services revenue Net sales Total revenue Cost of goods sold Depreciation expense-0ffice equipment Depreciation expense-Computer equipment Nages expense Insurance expense Rent expense Computer supplies expense Advertising expense Mileage expense Repairs expense-Computer Total expenses Net income $25,107 18,293 43,400 $14,952 380 1,190 3,150 515 2,175 1,215 580 270 910 25, 337 $18,063

Explanation / Answer

BUSINESS SOLUTIONS Statement of Cashflows   For the 3 months Ended March 31, 2018 Cash flows from operating activities Net Income $ 18,063 Adjustments to reconcile net income to : Depreciation expenses $      1,570 380+1190 Increase in accounts receivable $ (18,899) 5568-24467 Increase in inventory $       (684) 0-684 Increase in computer supplies $   (1,545) 550-2095 Decrease in prepaid insurance $         535 1595-1060 Decrease in accounts payable $   (1,110) 0-1110 Increase in wages payable $         395 965-570 Decrease in unearned computer service revenue $   (2,400) 0-2400 Net cash flow from operating activities $ (4,075) Cash flows from investing activities Net cash provided by investing activities $             - Cash flows from financing activities Proceeds from issuance of common stock $   26,000 Cash paid for dividends $   (4,600) Net cash provided by financing activities $ 21,400 Net Decrease in cash and cash equivalents $ 17,325 Cash and cash equivalents at beginning of period $ 51,692 Cash and cash equivalents at end of period $ 69,017

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