WHAT AM I MISSING???
VIRTUAL GAMING SYSTEMS Balance Sheets December 31 2021 2020 $ $ 355,520 66,200 157,000 4,480 291,840 82,000 143,000 6,960 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 213,000 214,000 246,000 (140,000) $1,116,200 120,000 268,000 218,000 (109,000) $1,020,800 $ $ 34,000 5,000 24,200 96,000 3,800 28,000 261,000 233,000 438,000 354,000 $1,116,200 380,000 280,000 $1,020,800 Additional Information for 2021: 1. Purchase additional investment in stocks for $93,000. 2. Sell land costing $54,000 for $60,000, resulting in a $6,000 gain on sale of land. 3. Purchase $28,000 in equipment by issuing a $28,000 long-term note payable to the seller. No cash is exchanged in the transaction. 4. Declare and pay a cash dividend of $118,000. 5. Issue common stock for $58,000. Answer is complete but not entirely correct. $ 192,000 VIRTUAL GAMING SYSTEMS Statement of Cash Flows For the Year Ended December 31, 2021 Cash Flows from Operating Activities Net income Adjustments to reconcile net income to net cash flows from operating activities: Gain (on sale of land) Depreciation expense Decrease in accounts receivable Increase in inventory Decrease in prepaid rent Decrease in accounts payable Increase in interest payable Decrease in income tax payable (6,000) 31,000 15,800 (14,000) 2,480 (62,000) 1,200 (3,800) $ 156,680 Net cash flows from operating activities Cash Flows from Investing Activities Proceeds from sale of land Purchase investment in stock 60,000 (93,000) Net cash flows from investing activities (33,000) Decrease in prepaid rent Decrease in accounts payable Increase in interest payable Decrease in income tax payable 2,480 (62,000) 1,200 (3,800) $ 156,680 Net cash flows from operating activities Cash Flows from Investing Activities Proceeds from sale of land Purchase investment in stock 60,000 (93,000) (33,000) Net cash flows from investing activities Cash Flows from Financing Activities Payment of cash dividends Issue common stock (118,000) 58,000 Net cash flows from financing activities Net increase in cash Cash at the beginning of the period Cash at the end of the period (60,000) 63,680 291,840 355,520 $ Note: Noncash Activities Purchase equipment issuing a note payable $ 233,000 X
