VIDEO PHONES, INC. Income Statement For the Year Ended December 31, 2015

Net sales

$

2,636,000

Expenses:

Cost of goods sold

$ 1,600,000

Operating expenses

788,000

Depreciation expense

20,000

Loss on sale of land

7,300

Interest expense

11,500

Income tax expense

41,000

Total expenses

2,467,800

Net income

$

168,200

VIDEO PHONES, INC. Balance Sheet December 31

2015

2014

Assets

Current assets:

Cash

$

159,180

$

85,940

Accounts receivable

73,300

53,000

Inventory

105,000

128,000

Prepaid rent

9,120

4,560

Long-term assets:

Investments

98,000

0

Land

203,000

226,000

Equipment

256,000

203,000

Accumulated depreciation

(60,600)

(40,600)

Total assets

$

843,000

$

659,900

Liabilities and Stockholders' Equity

Current liabilities:

Accounts payable

$

59,700

$

74,000

Interest payable

5,300

8,600

Income tax payable

14,300

13,300

Long-term liabilities:

Notes payable

271,000

218,000

Stockholders' equity:

Common stock

230,000

230,000

Retained earnings

262,700

116,000

Total liabilities and stockholders equity

$

843,000

$

659,900

Additional Information for 2015:
1.	Purchase investment in bonds for $98,000.
2.	Sell land costing $23,000 for only $15,700, resulting in a $7,300 loss on sale of land.
3.	Purchase $53,000 in equipment by borrowing $53,000 with a note payable due in three years. No cash is exchanged in the transaction.
4.	Declare and pay a cash dividend of $21,500.

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.)