VIDEO PHONES, INC Income Statement For the Year Ended December 31, 2015 Net sales Expenses S 3,536,000 $2,350,000 938,000 35,000 8,800 19,000 56,000 Cost of goods sold Operatingexpenses Depreciation expense Loss on sale Interest expense Income tax expense of land Total expenses 3,406,800 Net income $ 129,200 VIDEO PHONES, INC Balance Sheet December 31 2015 2014 Assets Current assets Cash Accounts receivable Inventory Prepaid rent $ 260,880 $211,040 89,800 68,000 105,000 143,000 6,960 13,920 Long-term assets: 113,000 Investments Land Equipment Accumulated depreciation 218,000 256,000 286,000 218,000 (78,600 (43,600) Total assets 1,008,000 $859,400 Liabilities and Stockholders' Equity Current liabilities Accounts payable Interest payable Income tax payable $ 73,200 $ 89,000 6,800 11,600 15,800 14,800 Long-term liabilities able 301000 233,000 Notes pay Stockholders' equity: Common stock Retained earnings 380,000 380,000 231,200 131,000 Total liabilities and stockholders' equity $ 1,008,000 $859,400 Additional Information for 2015 1. Purchase investment in bonds for $113,000 2. Sell land costing $38,000 for only $29,200, resulting in a $8,800 loss on sale of land. 3. Purchase $68,000 in equipment by borrowing $68,000 with a note payable due in three years. No cash is exchanged in the transaction. 4. Declare and pay a cash dividend of $29,000. 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.) VIDEO PHONES, INC Statement of Cash Flows For the Year Ended December 31, 2015 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 Activities