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Problem 11-4A Prepare a statement of cash flowsindirect method (LO11-2, 11-3, 11-4, 11-5)

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				$	2,576,000
Expenses:
Cost of goods sold	$	1,550,000
Operating expenses		778,000
Depreciation expense		19,000
Loss on sale of land		7,200
Interest expense		11,000
Income tax expense		40,000
Total expenses					2,405,200
Net income				$	170,800

VIDEO PHONES, INC.
Balance Sheets
December 31
	2021				2020
Assets
Current assets:
Cash	$	152,320			$	77,560
Accounts receivable		72,200				52,000
Inventory		105,000				127,000
Prepaid rent		8,880				4,440
Long-term assets:
Investments		97,000				0
Land		202,000				224,000
Equipment		254,000				202,000
Accumulated depreciation		(59,400	)			(40,400	)
Total assets	$	832,000			$	646,600
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	58,800			$	73,000
Interest payable		5,200				8,400
Income tax payable		14,200				13,200
Long-term liabilities:
Notes payable		269,000				217,000
Stockholders' equity:
Common stock		220,000				220,000
Retained earnings		264,800				115,000
Total liabilities and stockholders equity	$	832,000			$	646,600

Additional Information for 2021:

1. Purchase investment in bonds for $97,000.
2. Sell land costing $22,000 for only $14,800, resulting in a $7,200 loss on sale of land.
3. Purchase $52,000 in equipment by issuing a $52,000 long-term note payable to the seller. No cash is exchanged in the transaction.
4. Declare and pay a cash dividend of $21,000.

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.)

Problem 11-4A Prepare a statement of cash flows-indirect method (LO11-2, 11-3, 11-4, 11-5) 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 $2,576,000 Net sales. Expenses: $1,550,000 778,000 19,000 Cost of goods sold Operating expenses Depreciation expense Loss on sale of land. Interest expense Income tax expense Total expenses. 7,200 11,000 40,000 2,405,200 Net income $ 170,800 VIDEO PHONES, INC. Balance Sheets December 31 2020 Assets Current assets: Cash Accounts receivable. $ 77,560 52,000 Inventory 127,000 4,440 Prepaid rent Long-term assets: Investments 0 Land 224,000 Equipment 202,000 Accumulated depreciation. (40,400) Total assets $ 832,000 $646,600 Liabilities and Stockholders' Equity. Current liabilities: Accounts payable $ 58,800 $ 73,000 Interest payable 5,200 8,400 13,200 Income tax payable Long-term liabilities: 14, 200 269,000 217,000 Notes payable Stockholders' equity: Common stock 220,000 220,000 Retained earnings 115,000 264,800 $646,600 Total liabilities and stockholders' equity $ 832,000 Additional Information for 2021: 1. Purchase investment in bonds for $97,000. 2. Sell land costing $22,000 for only $14,800, resulting in a $7,200 loss on sale of land. 3. Purchase $52,000 in equipment by issuing a $52,000 long-term note payable to the seller. No cash is exchanged in the transaction. 4. Declare and pay a cash dividend of $21,000. 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.) 2021 $152,320 72,200 105,000 8,880 97,000 202,000 254,000 (59,400) VIDEO PHONES, INC. Statement of Cash Flows For the Year Ended December 31, 2021 Cash Flows from Operating Activities: Adjustments to reconcile net income to net cash flows from operating activities: Net cash flows from operating activities Cash Flows from Investing Activities: Net cash flows from investing activities Cash Flows from Financing Activities: Net cash flows from financing activities Cash at the beginning of the period Cash at the end of the period Note: Noncash Activities