Question 11

Check my work mode : This shows what is correct or incorrect for the work you ha ***** Answer is not complete. VIDEO PHONES, INC. Statement of Cash Flows For the Year Ended December 31, 2018 Cash Flows from Operating Activities: Net income 104,000 Adjustments to reconcile net income to net cash flows from operating activities: Depreciation expense 37,000 Loss (on sale of land) 9,000 Increase in accounts receivable (22,000) Decrease in inventory 40,000 Increase in prepaid rent (7.200) Decrease in accounts payable (16,000) Decrease in interest payable (5,000) Increase in income tax payable 1,000 140,800 Net cash flows from operating activities Cash Flows from Investing Activities: Purchase investment in bonds Loss (on sale of land) Purchase equipment issuing a note payable (115,000) 31.000 70,000 (14,000) Net cash flows from investing activities Cash Flows from Financing Activities: Decrease in accounts payable Payment of cash dividends $ $ (70,000) $ (30,000) 11 Increase in accounts receivable Decrease in inventory Increase in prepaid rent Decrease in accounts payable Decrease in interest payable Increase in income tax payable (22,000) 40,000 (7.200) (16,000) (5,000) 1,000 rt nts $ 140,800 Net cash flows from operating activities Cash Flows from Investing Activities: Purchase investment in bonds Loss (on sale of land) Purchase equipment issuing a note payable x x (115,000) 31,000 70,000 (14,000) Net cash flows from investing activities Cash Flows from Financing Activities: Decrease in accounts payable Payment of cash dividends $ (70,000) $ (30,000) Net cash flows from financing activities Net increase in cash Cash at the beginning of the period Cash at the end of the period Note: Noncash Activities (100,000) 26,800 227,800 $ 254,600 Additional Information for 2018: 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 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 outflows and any decrease in cash as negative amounts.) 11 1.04 points The income statement, balance sheets, and additional information for Video Phones 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 VIDEO PHONES, INC. Balance Sheets December 31 2018 2017 Assets Current assets: Cash Accounts receivable Inventory Prepaid rent Long-term assets: Investments Land Equipment Accumulated depreciation 254,600 $ 227,800 92,000 70,000 105,000 145,000 14,400 7,200 115,000 220,000 290,000 (81,000) 0 260,000 220,000 (44,000) Mc Grow Hall