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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 | ||||||
Net sales | $ | 2,886,000 | ||||
Expenses: | ||||||
Cost of goods sold | $ | 1,800,000 | ||||
Operating expenses | 828,000 | |||||
Depreciation expense | 24,000 | |||||
Loss on sale of land | 7,700 | |||||
Interest expense | 13,500 | |||||
Income tax expense | 45,000 | |||||
Total expenses | 2,718,200 | |||||
Net income | $ | 167,800 |
VIDEO PHONES, INC. | ||||||||
Balance Sheets | ||||||||
December 31 | ||||||||
2021 | 2020 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash | $ | 196,620 | $ | 119,460 | ||||
Accounts receivable | 77,700 | 57,000 | ||||||
Inventory | 105,000 | 132,000 | ||||||
Prepaid rent | 10,080 | 5,040 | ||||||
Long-term assets: | ||||||||
Investments | 102,000 | 0 | ||||||
Land | 207,000 | 234,000 | ||||||
Equipment | 264,000 | 207,000 | ||||||
Accumulated depreciation | (65,400 | ) | (41,400 | ) | ||||
Total assets | $ | 897,000 | $ | 713,100 | ||||
Liabilities and Stockholders' Equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 63,300 | $ | 78,000 | ||||
Interest payable | 5,700 | 9,400 | ||||||
Income tax payable | 14,700 | 13,700 | ||||||
Long-term liabilities: | ||||||||
Notes payable | 279,000 | 222,000 | ||||||
Stockholders' equity: | ||||||||
Common stock | 270,000 | 270,000 | ||||||
Retained earnings | 264,300 | 120,000 | ||||||
Total liabilities and stockholders equity | $ | 897,000 | $ | 713,100 |
Additional Information for 2021:
- Purchase investment in bonds for $102,000.
- Sell land costing $27,000 for only $19,300, resulting in a $7,700 loss on sale of land.
- Purchase $57,000 in equipment by issuing a $57,000 long-term note payable to the seller. No cash is exchanged in the transaction.
- Declare and pay a cash dividend of $23,500.
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, 2021 Net sales $2,886,000 Expenses: Cost of goods sold Operating expenses Depreciation expense $1,800,000 828,000 24,000 7,700 13,500 Loss on sale of land Interest expense 45,000 Income tax expense Total expenses 2,718,200 Net income 167,800 VIDEO PHONES, INC Balance Sheets December 31 2021 2020 Assets Current assets: Cash $196,620 77,700 105,000 $119,460 57,000 Accounts receivable 132,000 5,040 Inventory Prepaid rent Long-term assets: 10,080 102,000 207,000 264,000 (65,400) 0 Investments 234,000 207,000 (41,400) Land Equipment Accumulated depreciation $897,000 Total assets $713,100 Liabilities and Stockholders' Equity Current liabilities: Accounts payable Interest payable Income tax payable Long-term liabilities Notes payable Stockholders' equity: 63,300 5,700 14,700 $78,000 9,400 13,700 279,000 222,000 Common stock 270,000 264,300 270,000 120,000 Retained earnings Total liabilities and stockholders equity $897,000 $713,100 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
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