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The income statement, balance sheets, and additional information for Video Phones, Inc., are provided. $ 2,886,000 VIDEO PHONES, INC. Income Statement For the Year Ended
The income statement, balance sheets, and additional information for Video Phones, Inc., are provided.
$ 2,886,000 VIDEO PHONES, INC. Income Statement For the Year Ended December 31, 2018 Net sales 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 Sheet December 31 2018 2017 $ $ Assets Current assets: Cash Accounts receivable Inventory Prepaid rent Long-term assets: Investments Land Equipment Accumulated depreciation 196,620 77,700 105,000 10,080 119,460 57,000 132,000 5,040 102,000 207,000 264,000 (65,400) 234,000 207,000 (41,400) Total assets $ 897,000 $ 713,100 63,300 $ 5,700 14,700 78,000 9,400 13,700 Liabilities and Stockholders' Equity Current liabilities: Accounts payable Interest payable Income tax payable Long-term liabilities: Notes payable Stockholders' equity: Common stock Retained earnings 279,000 222,000 270,000 264,300 270,000 120,000 Total liabilities and stockholders' equity $ 897,000 $ 713,100 Additional Information for 2018: 1. Purchase investment in bonds for $102,000. 2. Sell land costing $27,000 for only $19,300, resulting in a $7,700 loss on sale of land. 3. Purchase $57,000 in equipment by issuing a $57,000 long-term note payable to the seller. No cash is exchanged in the transaction. 4. 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.) 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: 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 ActivitiesStep by Step Solution
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