ACCT2-103 Serial Problem Success Systems

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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.)

Grading Rubrics

Critical Elements

Distinguished

(100%)

Proficient

(85%)

Basic

(70%)

Below Expectations

(50%)

Non-Performance

(0%)

Thesis Statement

Raises the strongest objection to the thesis presented in the assignment. The objection is strongly grounded in research and logical reasoning.

Raises a plausible objection to the thesis presented in the assignment. The objection is mostly grounded in research and logical reasoning.

Raises an objection to the thesis presented in the assignment. The objection is somewhat grounded in research and logical reasoning.

Attempts to raise an objection to the thesis presented in the assignment. The objection is minimally grounded in research and logical reasoning.

The objection to the thesis is either nonexistent or lacks the components described in the assignment instructions.

Counter Argument

Provides a astrong, thorough rebuttal to the objection. The rebuttal effectively demonstrates that the thesis can withstand the objection and applies the principles of charity and accuracy.

Provides a rebuttal to the objection. The rebuttal mostly demonstrates that the thesis can withstand the objection and mostly applies the principles of charity and accuracy.

Provides a limited rebuttal to the objection. The rebuttal somewhat demonstrates that the thesis can withstand the objection and somewhat applies the principles of charity and accuracy.

Attempts to provide a rebuttal to the objection; however, the rebuttal minimally demonstrates that the thesis can withstand the objection and does not apply the principles of charity and accuracy.

The rebuttal is either nonexistent or lacks the components described in the assignment instructions.

Conclusion

– Provides clear and concise closing remarks that comprehensively summarize the essay. The remarks consider the broader controversy and/or further research that could offer additional insight into the moral solution of the business problem.

Provides closing remarks that summarize the essay. The remarks mostly consider the broader controversy and/or further research that could offer additional insight into the moral solution of the business problem. The closing remarks are somewhat unclear.

Provides closing remarks that minimally summarizes the essay. The remarks minimally consider the broader controversy and/or further research that could offer additional insight into the moral solution of the business problems. The closing remarks are unclear and/or vague.

Attempts to provide closing remarks that summarize the essay, however, the remarks do not consider the broader controversy and/or further research that could offer additional insight into the moral solution of the business problem. The closing remarks are unclear and vague.

The closing remarks are either nonexistent or lack the components described in the assignment instructions.

Written Communication: Context of and Purpose for Writing

Demonstrates methodical application of organization and presentation of content. The purpose of the writing is evident and easy to understand. Summaries, quotes, and/or paraphrases fit naturally into the sentences and paragraphs. Paper flows smoothly.

Demonstrates sufficient application of organization and presentation of content. The purpose of the writing is, for the most part, clear and easy to understand. There are some problems with the blending of summaries, paraphrases, and quotes. Paper flows somewhat smoothly.

Demonstrates a limited understanding of organization and presentation of content in written work. The purpose of the writing is somewhat evident but may not be integrated throughout the assignment. There are many problems with the blending of summaries, paraphrases, and quotes. Paper does not flow smoothly in all sections.

Organization and presentation of content are extremely limited. The purpose of the writing is unclear. There is little or no blending of summaries, paraphrases, and quotes. Paper does not flow smoothly when read.