The income statement, balance sheets, and additional information for Video Phones, Inc., are provided. VIDEO PHONES,
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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 | $ | 3,536,000 | ||||
Expenses: | ||||||
Cost of goods sold | $ | 2,350,000 | ||||
Operating expenses | 938,000 | |||||
Depreciation expense | 35,000 | |||||
Loss on sale of land | 8,800 | |||||
Interest expense | 19,000 | |||||
Income tax expense | 56,000 | |||||
Total expenses | 3,406,800 | |||||
Net income | $ | 129,200 | ||||
VIDEO PHONES, INC. | ||||||||
Balance Sheets | ||||||||
December 31 | ||||||||
2021 | 2020 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash | $ | 260,880 | $ | 211,040 | ||||
Accounts receivable | 89,800 | 68,000 | ||||||
Inventory | 105,000 | 143,000 | ||||||
Prepaid rent | 13,920 | 6,960 | ||||||
Long-term assets: | ||||||||
Investments | 113,000 | 0 | ||||||
Land | 218,000 | 256,000 | ||||||
Equipment | 286,000 | 218,000 | ||||||
Accumulated depreciation | (78,600 | ) | (43,600 | ) | ||||
Total assets | $ | 1,008,000 | $ | 859,400 | ||||
Liabilities and Stockholders' Equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 73,200 | $ | 89,000 | ||||
Interest payable | 6,800 | 11,600 | ||||||
Income tax payable | 15,800 | 14,800 | ||||||
Long-term liabilities: | ||||||||
Notes payable | 301,000 | 233,000 | ||||||
Stockholders' equity: | ||||||||
Common stock | 380,000 | 380,000 | ||||||
Retained earnings | 231,200 | 131,000 | ||||||
Total liabilities and stockholders’ equity | $ | 1,008,000 | $ | 859,400 | ||||
Additional Information for 2021:
- Purchase investment in bonds for $113,000.
- Sell land costing $38,000 for only $29,200, resulting in a $8,800 loss on sale of land.
- Purchase $68,000 in equipment by issuing a $68,000 long-term note payable to the seller. No cash is exchanged in the transaction.
- 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.)
Related Book For
Financial Accounting
ISBN: 978-0078025549
3rd edition
Authors: J. David Spiceland, Wayne Thomas, Don Herrmann
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