The income statement, balance sheets, and additional information for Video Phones, Incorporated, are provided. Net sales Expenses: VIDEO PHONES, INCORPORATED Income Statement For the Year Ended December 31, 2024 Cost of goods sold Operating expenses Depreciation expense Loss on sale of land Interest expense Income tax expense Total expenses Net income $2,450,000 958,000 37,000 9,000 20,000 58,000 $3,636,000 3,532,000 $ 104,000 Assets Current assets: Cash Accounts receivable Inventory Prepaid rent Long-term assets: Investments Land VIDEO PHONES, INCORPORATED Balance Sheets December 31 Equipment Accumulated depreciation Total assets Liabilities and Stockholders' Equity Current Liabilities: Accounts payable Interest payable Income tax payable Lennutare ishili+ion 2024 2023 $254,600 $ 227,800 92,000 70,000 105,000 145,000 14,400 7,200 115,000 0 220,000 260,000 290,000 220,000 (81,000) (44,000) $1,010,000 $886,000 $ 75,000 7,000 16,000 $ 91,000 12,000 15,000 Prev 1 of 2 Next > Assets VIDEO PHONES, INCORPORATED Balance Sheets December 31 2024 2023 Current assets: Cash Accounts receivable Inventory Prepaid rent Long-term assets: Investments Land Equipment Accumulated depreciation Total assets Liabilities and Stockholders' Equity Current Liabilities: Accounts payable Interest payable Income tax payable Long-term liabilities: Notes payable Stockholders' equity: Common stock Retained earnings. Total liabilities and stockholders' equity Additional Information for 2024: 1. Purchased investment in bonds for $115,000. $ 254,600 $ 227,800 92,000 105,000 14,400 70,000 145,000 7,200 115,000 0 220,000 260,000 290,000 220,000 (81,000) (44,000) $1,010,000 $886,000 $ 75,000 $ 91,000 7,000 12,000 16,000 15,000 305,000 235,000 400,000 400,000 207,000 133,000 $1,010,000 $886,000 2. Sold land for $31,000. The land originally was purchased for $40,000, resulting in a $9,000 loss being recorded at the time of the sale. 3. Purchased $70,000 in equipment by issuing a $70,000 long-term note payable to the seller. No cash was exchanged in the transaction. 4. Declared and paid a cash dividend of $30,000. W Required: Prepare the statement of cash flows using the indirect method. Disclose any noncash transactions in an accompanying note. (Amounts to be deducted, cash outflows, and any decrease in cash should be indicated with a minus sign.) Cash Flows from Operating Activities: Net income VIDEO PHONES, INCORPORATED Statement of Cash Flows For the Year Ended December 31, 2024 Adjustments to reconcile net income to net cash flows from operating activities: Depreciation expense Loss (on sale of land) Increase in accounts receivable Decrease in inventory Increase in prepaid rent Decrease in accounts payable Decrease in interest payable Increase in income tax payable $ 104,000 37,000 9,000 (92,000) Net cash flows from operating activities Cash Flows from Investing Activities: Purchase investment in bonds Loss (on sale of land) Not cash flows from investing activities Prou $ 58,000 Increase in prepaid rent Decrease in accounts payable Decrease in interest payable Increase in income tax payable Net cash flows from operating activities Cash Flows from Investing Activities: Purchase investment in bonds Loss (on sale of land) Net cash flows from investing activities Cash Flows from Financing Activities: Depreciation expense 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 Purchase equipment by issuing a note payable $ 58,000 0 0 $ 0