Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Description Problem 11-4A Prepare a statement of cash flows- indirect method (LO11-2, 11-3, 11-4, 11-5) The income statement, balance sheets, and additional information for Video
Description Problem 11-4A Prepare a statement of cash flows- indirect method (LO11-2, 11-3, 11-4, 11-5) 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 $2,936,000 Expenses: Cost of goods sold $1,850,000 Operating expenses 838,000 Depreciation expense 25,000 Loss on sale of land 7,800 Interest expense 14,000 Income tax expense 46,000 Total expenses 2,780,800 Net income $ 155,200 VIDEO PHONES, INC. Balance Sheets December 31 2021 2020 Assets Current assets: Cash $193,480 $127,840 Accounts receivable 78,800 58,000 Inventory 105,000 133,000 Prepaid rent 10,320 5,160 Long-term assets: Investments 103,000 0 Land 208,000 236,000 Equipment 266,000 208,000 Accumulated depreciation (66,600) (41,600 ) Total assets $898,000 $726,400 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $64,200 $79,000 Interest payable 5,800 9,600 Income tax payable 14,800 13,800 Long-term liabilities: Notes payable 281,000 223,000 Stockholders' equity: Common stock 280,000 280,000 Retained earnings 252,200 121,000 Total liabilities and stockholders' equity $898,000 $726,400 Additional Information for 2021: 1. Purchase investment in bonds for $103,000. 2. Sell land costing $28,000 for only $20,200, resulting in a $7,800 loss on sale of land. 3. Purchase $58,000 in equipment by issuing a $58,000 long-term note payable to the seller. No cash is exchanged in the transaction. 4. Declare and pay a cash dividend of $24,000. 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.)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started