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The income statement, balance sheets, and additional information for Video Phones, Inc., are provided. Additional Information for 2021: Purchase investment in bonds for $107,000. Sell
The income statement, balance sheets, and additional information for Video Phones, Inc., are provided.
Additional Information for 2021:
- Purchase investment in bonds for $107,000.
- Sell land costing $32,000 for only $23,800, resulting in a $8,200 loss on sale of land.
- Purchase $62,000 in equipment by issuing a $62,000 long-term note payable to the seller. No cash is exchanged in the transaction.
- Declare and pay a cash dividend of $26,000.
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.)
$3,136,000 VIDEO PHONES, INC. Income Statement For the Year Ended December 31, 2021 Net sales Expenses: Cost of goods sold $2,050,000 Operating expenses 878,000 Depreciation expense 29,000 Loss on sale of land 8,200 Interest expense 16,000 Income tax expense 50,000 Total expenses Net income 3,031,200 $ 104,800 VIDEO PHONES, INC. Balance Sheets December 31 2021 2020 $ 179, 720 83,200 105,000 12,480 $160,760 62,000 137,000 6,240 Assets 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 107,000 212,000 274,000 (71,400) $ 902,000 244,000 212,000 (42,400) $779,600 $ 67,800 6, 200 15, 200 $ 83,000 10,400 14,200 289,000 227,000 320,000 203,800 $ 902,000 320,000 125,000 $779,600Step by Step Solution
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