Data for Video Phones, Inc., are provided in P11–4A.

Required:

Prepare the statement of cash flows for Video Phones, Inc., using the direct method. Disclose any noncash transactions in an accompanying note.

P11-4A

The income statement, balance sheets, and additional information for Video Phones, Inc., are provided.

Additional Information for 2021:

1. Purchase investment in bonds for $115,000.

2. Sell land costing $40,000 for only $31,000, resulting in a $9,000 loss on sale of land.

3. Purchase $70,000 in equipment by issuing a $70,000 long-term note payable to the seller. No cash is exchanged in the transaction.

4. Declare and pay a cash dividend of $30,000.

Transcribed Image Text:

VIDEO PHONES, INC. Income Statement For the year ended December 31, 2021 Net sales $3,636,000 Expenses: Cost of goods sold $2,450,000 Operating expenses Depreciation expense 958,000 37,000 Loss on sale of land 9,000 Interest expense 20,000 Income tax expense 58,000 Total expenses 3,532,000 $ 104,000 Net income