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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,
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 $2,456, 000 Net sales Expenses: $1,450,000 758,000 17,000 7,000 10,000 38,000 Cost of goods sold Operating expenses Depreciation expense Loss on sale of land Interest expense Income tax expense 2.280,000 Total expenses $ 176,000 Net income VIDEO PHONES, INC. Balance Sheets December 31 2021 2020 Assets Current assets Cash Accounts receivable Inventory Prepaid rent $138,600 70,000 105,000 8,400 60,800 50,000 125,000 4,200 Long-term assets: 95,000 200,000 250,000 Investments Land Equipment Accumulated depreciation 220,000 200,000 (57,000) (40,000 $810,000 620,000 Total assets Liabilities and Stockholders' Equity Current liabilities: Accounts payable Interest payable Income tax payable $ 57,000 5,000 14,000 71,000 8,000 13,000 Long-term liabilities: Notes payable 265,000 215,000 Stockholders' equity: 200,000 269,000 $810,000 200,000 113,000 620,000 Common stock Retained earnings Total liabilities and stockholders' equity Additional Information for 2021: 1. Purchase investment in bonds for $95,000. 2. Sell land costing $20,000 for only $13,000, resulting in a $7,000 loss on sale of land 3. Purchase $50,000 in equipment by issuing a $50,000 long-term note payable to the seller. No cash is exchanged in the transaction. 4. Declare and pay a cash dividend of $20,000 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.)
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