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				$	24,807
Net sales					17,693
Total revenue					42,500
Cost of goods sold	$	14,352
Depreciation expenseOffice equipment		340
Depreciation expenseComputer equipment		1,210
Wages expense		2,650
Insurance expense		545
Rent expense		2,175
Computer supplies expense		1,305
Advertising expense		520
Mileage expense		260
Repairs expenseComputer		950
Total expenses					24,307
Net income				$	18,193

SUCCESS SYSTEMS
Comparative Balance Sheets
December 31, 2013, and March 31, 2014
	2014				2013
Assets
Cash	$	80,297			$	60,142
Accounts receivable		24,267				4,668
Merchandise inventory		694				0
Computer supplies		2,075				560
Prepaid insurance		1,070				1,615
Prepaid rent		805				805
Office equipment		7,500				7,500
Accumulated depreciationOffice equipment		(680	)			(340	)
Computer equipment		19,100				19,100
Accumulated depreciationComputer equipment		(2,420	)			(1,210	)
Total assets	$	132,708			$	92,840
Liabilities and Equity
Accounts payable	$	0			$	1,170
Wages payable		955				510
Unearned computer service revenue		0				2,100
Common stock		110,000				81,000
Retained earnings		21,753				8,060
Total liabilities and equity	$	132,708			$	92,840

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 $29,000 to the business in exchange for additional stock in the first quarter of 2014 and has received $4,500 in cash dividends. (Amounts to be deducted should be indicated with a minus sign.)