The Income statement, balance sheets, and additional information for Video Phones, Inc., are provided. Net sales Expenses: VIDEO PHONES, INC. Income Statement For the Year Ended December 31, 2018 Cost of goods sold Operating expenses Depreciation expense Loss on sale of land Interest expense Income tax expense Total expenses Net income $ 3,636,000 $2,450,000 958,000 37,000 9,000 20,000 58,000 3,532,000 $ 104,000 Assets Current assets: Cash VIDEO PHONES, INC. Balance Sheets December 31 2018 2017 254,600 $ 227,800 VIULVTTIVICO, m Balance Sheets December 31 Assets Current assets: Cash Accounts receivable Inventory Prepaid rent Long-term assets: Investments Land Equipment Accumulated depreciation Total assets 2018 2017 $ 254,600 $227,800 92,000 70,000 105,000 145,000 14,400 7,200 115,000 220,000 260,000 290,000 220,000 (81,000) (44,000) Liabilities and Stockholders' Equity Current liabilities: Accounts payable Interest payable Income tax payable $ 1,010,000 $ 886,000 75,000 $ 91,000 7,000 12,000 16,000 15,000 Long-term liabilities: Notes payable 305,000 235,000 Stockholders' equity: Common stock 400.000. 400,000 Total liabilities and stockholders' $ 1,010,000 $ 886,000 equity 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 accoying 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 Cash Flows from Operating Activities: Adjustments to reconcile net income to net cash flows from operating activities: MacBook Air VIDEO PHONES, INC. Statement of Cash Flows For the Year Ended December 31, 2018 Cash Flows from Operating Activities: nrt 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 Enhancing Artifice STA 0 Al P W L MacBook Air 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: Noncas Activities 34