Acc225 Fundamental Accounting Principles: Serial Problem 16 (SP16) Adriana Lopez, owner of Success

Acc225 Fundamental Accounting Principles Serial Problem 16 (SP16) Adriana 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, 2010 Computer service revenue 25,160 Net sales 18,693 Total revenue 43,853 Cost of goods sold 14,052 Depreciation expense - Office equipment 400 Depreciation expense - Computer 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 expense - Computer 960 Total expenses 25,167 Net income $18,686 Business Solutions Comparative Balance Sheets December 31, 2009 and March 31, 2010 2009 2010 Assets Cash 77,845 58,160 Accounts receivable 22,720 5,668 Merchandise inventory 704 - Computer supplies 2,005 580 Prepaid insurance 1,110 1,665 Prepaid rent 825 825 Office equipment 8,000 8,000 Accumulated depreciation - Office equipment (800) (400) Computer equipment 20,000 20,000 Accumulated depreciation - Computer equipment (2,500) (1,250) Total Assets $129,909 $93,248 Liabilities and Equity Accounts payable - 1,100 Wages payable 875 500 Unearned computer service revenue - 1,500 Common stock 108,000 83,000 Retained earnings 21,034 7,148 Total Liabilities and Equity $129,909 $93,248 Required: Prepare a statement of cash flows for Success Systems using the indirect method for the three months ended March 31, 2010. Recall that the owner Adriana Lopez contributed $25,000 to the business in exchange for additional stock in the first quarter of 2010 and has received $4,800 in cash dividends.
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