Question 11

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, 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 -K inces ts eBook 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: Investments 115,000 o Land 220,000 260,000 Equipment 290,000 220,000 Accumulated depreciation (81,000) (44,000) Print References Total assets $ 1,010,000 $ 886,000 $ 75,000 $ 91,000 7,000 12,000 16,000 15,000 Liabilities and Stockholders' Equity Current liabilities: Accounts payable Interest payable Income tax payable Long-term liabilities: Notes payable Stockholders' equity: Common stock Retained earnings 305,000 235,000 400,000 207,000 400,000 133,000 Total liabilities and stockholders' equity $ 1,010,000 $ 886,000 11 104 points 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.) eBook Print VIDEO PHONES, INC. Statement of Cash Flows For the Year Ended December 31, 2018 Cash Flows from Operating Activities: References Adjustments to reconcile not income to net cash flows from operating activities: Net cash flows from operating activities Cash Flows from investing Activities 11 Cash Flows from Operating Activities: Adjustments to reconcile net income to net cash flows from operating activities: 4 ints eBook Print References 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 Mc