The income statement, balance sheets, and additional information for Video Phones, Inc., are provided. VIDEO PHONES, INC. Income Statement For the Year Ended December 31, 2021 Net sales $ 3,436,000 Expenses: Cost of goods sold $ 2,250,000 Operating expenses 918,000 Depreciation expense 33,000 Loss on sale of land 8,600 Interest expense 18,000 Income tax expense 54,000 Total expenses 3,281,600 Net income $ 154,400 VIDEO PHONES, INC. Balance Sheets December 31 2021 2020 Assets Current assets: Cash $ 267,160 $ 194,280 Accounts receivable 87,600 66,000 Inventory 105,000 141,000 Prepaid rent 13,440 6,720 Long-term assets: Investments 111,000 0 Land 216,000 252,000 Equipment 282,000 216,000 Accumulated depreciation (76,200 ) (43,200 ) Total assets $ 1,006,000 $ 832,800 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 71,400 $ 87,000 Interest payable 6,600 11,200 Income tax payable 15,600 14,600 Long-term liabilities: Notes payable 297,000 231,000 Stockholders' equity: Common stock 360,000 360,000 Retained earnings 255,400 129,000 Total liabilities and stockholders’ equity $ 1,006,000 $ 832,800 Additional Information for 2021: Purchase investment in bonds for $111,000. Sell land costing $36,000 for only $27,400, resulting in a $8,600 loss on sale of land. Purchase $66,000 in equipment by issuing a $66,000 long-term note payable to the seller. No cash is exchanged in the transaction. Declare and pay a cash dividend of $28,000. Required: Prepare the statement of cash flows using the indirect method. Disclose any noncash transactions in an accompanying note. (List cash outflows and any decrease in cash as negative amounts.)

The income statement, balance sheets, and additional information for Video Phones, Inc., are provided. VIDEO PHONES, INC. Income Statement For the Year Ended December 31, 2021 Net sales $ 3,436,000 Expenses: Cost of goods sold $ 2,250,000 Operating expenses 918,000 Depreciation expense 33,000 Loss on sale of land 8,600 Interest expense 18,000 Income tax expense 54,000 Total expenses 3,281,600 Net income $ 154,400 VIDEO PHONES, INC. Balance Sheets December 31 2021 2020 Assets Current assets: Cash $ 267,160 $ 194,280 Accounts receivable 87,600 66,000 Inventory 105,000 141,000 Prepaid rent 13,440 6,720 Long-term assets: Investments 111,000 0 Land 216,000 252,000 Equipment 282,000 216,000 Accumulated depreciation (76,200 ) (43,200 ) Total assets $ 1,006,000 $ 832,800 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 71,400 $ 87,000 Interest payable 6,600 11,200 Income tax payable 15,600 14,600 Long-term liabilities: Notes payable 297,000 231,000 Stockholders' equity: Common stock 360,000 360,000 Retained earnings 255,400 129,000 Total liabilities and stockholders’ equity $ 1,006,000 $ 832,800 Additional Information for 2021: Purchase investment in bonds for $111,000. Sell land costing $36,000 for only $27,400, resulting in a $8,600 loss on sale of land. Purchase $66,000 in equipment by issuing a $66,000 long-term note payable to the seller. No cash is exchanged in the transaction. Declare and pay a cash dividend of $28,000. Required: Prepare the statement of cash flows using the indirect method. Disclose any noncash transactions in an accompanying note. (List cash outflows and any decrease in cash as negative amounts.)

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 Video Phones, Inc., are provided.

VIDEO PHONES, INC.
Income Statement
For the Year Ended December 31, 2021
Net sales			$	3,436,000
Expenses:
Cost of goods sold	$	2,250,000
Operating expenses		918,000
Depreciation expense		33,000
Loss on sale of land		8,600
Interest expense		18,000
Income tax expense		54,000
Total expenses				3,281,600
Net income			$	154,400

VIDEO PHONES, INC.
Balance Sheets
December 31
	2021		2020
Assets
Current assets:
Cash	$	267,160		$	194,280
Accounts receivable		87,600			66,000
Inventory		105,000			141,000
Prepaid rent		13,440			6,720
Long-term assets:
Investments		111,000			0
Land		216,000			252,000
Equipment		282,000			216,000
Accumulated depreciation		(76,200	)		(43,200	)
Total assets	$	1,006,000		$	832,800
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	71,400		$	87,000
Interest payable		6,600			11,200
Income tax payable		15,600			14,600
Long-term liabilities:
Notes payable		297,000			231,000
Stockholders' equity:
Common stock		360,000			360,000
Retained earnings		255,400			129,000
Total liabilities and stockholders’ equity	$	1,006,000		$	832,800

Additional Information for 2021:

Purchase investment in bonds for $111,000.
Sell land costing $36,000 for only $27,400, resulting in a $8,600 loss on sale of land.
Purchase $66,000 in equipment by issuing a $66,000 long-term note payable to the seller. No cash is exchanged in the transaction.
Declare and pay a cash dividend of $28,000.

Required:

Prepare the statement of cash flows using the indirect method. Disclose any noncash transactions in an accompanying note. (List cash outflows and any decrease in cash as negative amounts.)

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