VIDEO PHONES, INC. Income Statement For the Year Ended December 31, 2021 Net sales $2,516,000 Expenses: Cost of goods sold $1,500,000 Operating expenses 768,000 Depreciation expense 18,000 Loss on sale of land 7,100 Interest expense 10,500 Income tax expense 39,000 Total expenses 2,342,600 Net income $ 173,400 VIDEO PHONES, INC. Balance Sheets December 31 2021 2020 $145,460 71,100 105,000 8,640 $ 69,180 51,000 126,000 4,320 96,000 201,000 252,000 (58,200) $821,000 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 0 222,000 201,000 (40,200) $633,300 $ 57,900 5,100 14,100 $ 72,000 8,200 13,100 267,000 216,000 210,000 266,900 $821,000 210,000 114,000 $633, 300 1. Purchase investment in bonds for $96,000. 2. Sell land costing $21,000 for only $13,900, resulting in a $7,100 loss on sale of land. 3. Purchase $51.000 in equipment by Issuing a $51,000 long-term note payable to the seller. No cash is exchanged in the transaction. 4. Declare and pay a cash dividend of $20,500. VIDEO PHONES, INC. Statement of Cash Flows For the Year Ended December 31, 2021 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 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