ACCT2-103 - Serial Problem Success Systems (Indirect)

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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.)

    • 9 years ago
    ACCT2-103 - Serial Problem Success Systems (Indirect) - Excel sheet - Just input your figures and get 100% correct solution
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