11 The income statement, balance sheets, and additional information for Video Phones, Inc., are provided. nts eBook Print VIDEO PHONES, INC. Income Statement For the Year Ended December 31, 2018 Net sales $ 3,636,000 Expenses: Cost of goods sold $ 2,450,000 Operating expenses 958,000 Depreciation expense 37,000 Loss on sale of land 9,000 Interest expense 20,000 Income tax expense 58,000 Total expenses 3,532,000 Net income $ 104,000 References VIDEO PHONES, INC. Balance Sheets December 31 2018 2017 Assets Current assets: Cash 254,600 $ 227,800 Accounts receivable 92.000 70,000 Inventory 105,000 145,000 Prepaid rent 14,400 7,200 Long-term assets: Nort 11 Long-term assets: Investments Land Equipment Accumulated depreciation Total assets 115,000 220.000 260,000 290,000 220,000 (81000) (44,000) $ 1,010,000 $ 886,000 34 Do 75,000 $ 7.000 16.000 References Liabilities and Stockholders' Equity Current liabilities: Accounts payable Interest payable Income tax payable Long-term liabilities: Notes payable Stockholders' equity Common stock Retained earnings 91.000 12.000 15.000 235,000 305,000 400.000 207.000 400.000 133.000 $ 1010 000 $ 886.000 Total liabilities and stockholders' equity Additional Information for 2018: 1. Purchase investment in bonds for $115.000 2. Sell and costing $40,000 for only $31.000, resulting in a $9.000 loss on sale of land 3. Purchase $70,000 in equipment by borrowing $70.000 with a note payable due in three years. No cash is exchanged in the transaction 4. Declare and pay a cash dividend of $30,000. Required: Prepare the statement of cash flows using the indirect method. Disclose any noncash transactions in an accompanying note. List cash 11 Required: Prepare the statement of cash flows using the indirect method. Disclose any no outflows and any decrease in cash as negative amounts.) 1.04 points VIDEO PHONES, INC. Statement of Cash Flows For the Year Ended December 31, 2018 Cash Flows from Operating Activities: eBook Print References Adjustments to reconcile net income to net cash flows from operating activities: Net cash flows from operating activities Cash Flows from Investing Activities: 0 Net cash flows from investing activities 1 Net cash flows from operating activities Cash Flows from Investing Activities: $ 0 ok Int ences Net cash flows from investing activities Cash Flows from Financing Activities: 0 Net cash flows from financing activities 0 Cash at the beginning of the period Cash at the end of the period Note: Noncash Activities $ 0