The income statement, balance sheets, and additional information for Virtual Gaming Systems are provided. VIRTUAL GAMING SYSTEMSIncome StatementFor the Year Ended December 31, 2024Net sales $2,570,000Gain on sale of land 5,500Total revenues 2,575,500Expenses: Cost of goods sold$1,635,000 Operating expenses612,000 Depreciation expense30,000 Interest expense31,000 Income tax expense77,000 Total expenses 2,385,000Net income $190,500 VIRTUAL GAMING SYSTEMSBalance SheetsDecember 31 20242023Assets Current assets: Cash$343,380$280,860Accounts receivable67,30083,000Inventory155,500142,000Prepaid rent4,4206,840Long-term assets: Investments202,000110,000Land213,500267,000Equipment244,000217,000Accumulated depreciation(138,500)(108,500)Total assets$1,091,600$998,200Liabilities and Stockholders' Equity Current liabilities: Accounts payable$33,500$95,000Interest payable4,8003,700Income tax payable23,80027,500Long-term liabilities: Notes payable259,000232,000Stockholders' equity: Common stock427,000370,000Retained earnings343,500270,000Total liabilities and stockholders’ equity$1,091,600$998,200 Additional Information for 2024:Purchased additional investment in stocks for $92,000.Sold land for $59,000. The land originally was purchased for $53,500, resulting in a $5,500 gain being recorded at the time of the sale.Purchased $27,000 in equipment by issuing a $27,000 long-term note payable to the seller. No cash was exchanged in the transaction.Declared and paid a cash dividend of $117,000.Issued common stock for $57,000. Required:Prepare the statement of cash flows using the indirect method. Disclose any noncash transactions in an accompanying note. (Amounts to be deducted, cash outflows, and any decrease in cash should be indicated with a minus sign.) 2024YearIncrease (Decrease)2023AmountAssetsCurrent assets:CashAccounts receivableInventorySupplies$ 206,400 $ 292,5001,104,0001,237,5002,371,2001,575,000182,400135,000Long-term assets:EquipmentLess: Accumulated depreciationTotal assetsLiabilities and Stockholders' EquityCurrent liabilities:Accounts payableInterest payableIncome tax payableLong-term liabilities:Notes payableStockholders' equity:Common stock1,584,0001,584,000(648,000)(324,000)$4,800,000 $4,500,000$201,600 $ 117,00004,50072,00072,0001,368,0001,368,000922,500922,500Retained earnings2,235,9002,016,000Total liabilities and stockholders' equity$4,800,000 $ 4,500,000%

VIRTUAL GAMING SYSTEMSStatement of Cash FlowsFor the Year Ended December 31, 2024 2024 2023Operating…

Answered: 2024 Year Increase (Decrease) 2023…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

The income statement, balance sheets, and additional information for Virtual Gaming Systems are provided.

VIRTUAL GAMING SYSTEMS
Income Statement
For the Year Ended December 31, 2024
Net sales		$2,570,000
Gain on sale of land		5,500
Total revenues		2,575,500
Expenses:
Cost of goods sold	$1,635,000
Operating expenses	612,000
Depreciation expense	30,000
Interest expense	31,000
Income tax expense	77,000
Total expenses		2,385,000
Net income		$190,500

VIRTUAL GAMING SYSTEMS
Balance Sheets
December 31
	2024	2023
Assets
Current assets:
Cash	$343,380	$280,860
Accounts receivable	67,300	83,000
Inventory	155,500	142,000
Prepaid rent	4,420	6,840
Long-term assets:
Investments	202,000	110,000
Land	213,500	267,000
Equipment	244,000	217,000
Accumulated depreciation	(138,500)	(108,500)
Total assets	$1,091,600	$998,200
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$33,500	$95,000
Interest payable	4,800	3,700
Income tax payable	23,800	27,500
Long-term liabilities:
Notes payable	259,000	232,000
Stockholders' equity:
Common stock	427,000	370,000
Retained earnings	343,500	270,000
Total liabilities and stockholders’ equity	$1,091,600	$998,200

Additional Information for 2024:

Purchased additional investment in stocks for $92,000.
Sold land for $59,000. The land originally was purchased for $53,500, resulting in a $5,500 gain being recorded at the time of the sale.
Purchased $27,000 in equipment by issuing a $27,000 long-term note payable to the seller. No cash was exchanged in the transaction.
Declared and paid a cash dividend of $117,000.
Issued common stock for $57,000.

Required:

Prepare the statement of cash flows using the indirect method. Disclose any noncash transactions in an accompanying note. (Amounts to be deducted, cash outflows, and any decrease in cash should be indicated with a minus sign.)

2024
Year
Increase (Decrease)
2023
Amount
Assets
Current assets:
Cash
Accounts receivable
Inventory
Supplies
$ 206,400 $ 292,500
1,104,000
1,237,500
2,371,200
1,575,000
182,400
135,000
Long-term assets:
Equipment
Less: Accumulated depreciation
Total assets
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable
Interest payable
Income tax payable
Long-term liabilities:
Notes payable
Stockholders' equity:
Common stock
1,584,000
1,584,000
(648,000)
(324,000)
$
4,800,000 $4,500,000
$
201,600 $ 117,000
0
4,500
72,000
72,000
1,368,000
1,368,000
922,500
922,500
Retained earnings
2,235,900
2,016,000
Total liabilities and stockholders' equity
$
4,800,000 $ 4,500,000
%

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