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

VIDEO PHONES, INC. Income Statement For the Year Ended December 31, 2015

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 Sheet December 31

2015

2014

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

0

Land

220,000

260,000

Equipment

290,000

220,000

Accumulated depreciation

(81,000)

(44,000)

Total assets

$

1,010,000

$

886,000

Liabilities and Stockholders' Equity

Current liabilities:

Accounts payable

$

75,000

$

91,000

Interest payable

7,000

12,000

Income tax payable

16,000

15,000

Long-term liabilities:

Notes payable

305,000

235,000

Stockholders' equity:

Common stock

400,000

400,000

Retained earnings

207,000

133,000

Total liabilities and stockholders equity

$

1,010,000

$

886,000

Additional Information for 2015:

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

VIDEO PHONES, INC.
Statement of Cash Flows
For the Year Ended December 31, 2015
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