Question
The income statement, balance sheets, and additional information for Video Phones, Inc., are provided ABOVE. Additional Information for 2018: 1. Purchase investment in bonds for
The income statement, balance sheets, and additional information for Video Phones, Inc., are provided ABOVE.
Additional Information for 2018: 1. Purchase investment in bonds for $104,000. 2. Sell land costing $29,000 for only $21,100, resulting in a $7,900 loss on sale of land. 3. Purchase $59,000 in equipment by borrowing $59,000 with a note payable due in three years. No cash is exchanged in the transaction. 4. Declare and pay a cash dividend of $24,500.
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.)
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 $ 2,986,000 Net sales Expenses Cost of goods sold Operating expenses Depreciation expense Loss on sale of land Interest expense Income tax expense $1,900,000 848,000 26,000 7,900 14,500 47,000 Total expenses 2,843,400 Net income 142,600 VIDEO PHONES, INC Balance Sheet December 31 2018 2017 Assets Current assets Cash Accounts receivable Inventory Prepaid rent $190,340 $ 136,220 59,000 134,000 5,280 79,900 105,000 10,560 Long-term assets Investments Land Equipment Accumulated depreciation 104,000 209,000 268,000 (67,800) 238,000 209,000 (41,800) Total assets $899,000 $ 739,700 Liabilities and Stockholders' Equity Current liabilities Accounts payable Interest payable Income tax payable 65,100 80,000 9,800 13,900 5,900 14,900 283,000 290,000 Long-term liabilities Notes payable 224,000 Stockholders' equity: Common stock Retained earnings 290,000 122,000 240,100 Total liabilities and stockholders' equity $899,000 $ 739,700 Additional Information for 2018: 1. Purchase investment in bonds for $104,000 2. Sell land costing $29,000 for only $21,100, resulting in a $7,900 loss on sale of land 3. Purchase $59,000 in equipment by borrowing $59,000 with a note payable due in three years. No cash is exchanged in the transaction 4. Declare and pay a cash dividend of $24,500 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.) VIDEO PHONES, INC. Statement of Cash Flows For the Year Ended December 31, 2018 Please use these catagories for the boxes to the left, PLEASE select one of these from below and fill in the box Cash Flows from Operating Activities Decrease in accounts payable Decrease in interest payable Decrease in inventory Depreciation expense Gain (on sale of land) Increase in accounts receivable Increase in income tax payable Increase in notes payable Increase in prepaid rent Loss (on sale of land) Net income Net loss Payment of cash dividends Purchase equipment issuing a note pay Purchase investment in bonds Purchase of equipment Sale of land Adjustments to reconcile net income to net cash flows from operating activities Net cash flows from investing activities Cash Flows from Financing Activities Net cash flows from financing activities ash at the beginning of the period Cash at the end of the period Note: Noncash ActivitiesStep by Step Solution
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