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       $ 3,436,000   Expenses:             Cost of goods sold $ 2,250,000         Operating expenses   918,000         Depreciation expense   33,000         Loss on sale of land   8,600         Interest expense   18,000         Income tax expense   54,000         Total expenses         3,281,600   Net income       $ 154,400       VIDEO PHONES, INC. Balance Sheets December 31   2021   2020   Assets                 Current assets:                 Cash $ 267,160     $ 194,280     Accounts receivable   87,600       66,000     Inventory   105,000       141,000     Prepaid rent   13,440       6,720     Long-term assets:                 Investments   111,000       0     Land   216,000       252,000     Equipment   282,000       216,000     Accumulated depreciation   (76,200 )     (43,200 )   Total assets $ 1,006,000     $ 832,800     Liabilities and Stockholders' Equity                 Current liabilities:                 Accounts payable $ 71,400     $ 87,000     Interest payable   6,600       11,200     Income tax payable   15,600       14,600     Long-term liabilities:                 Notes payable   297,000       231,000     Stockholders' equity:                 Common stock   360,000       360,000     Retained earnings   255,400       129,000     Total liabilities and stockholders’ equity $ 1,006,000     $ 832,800         Additional Information for 2021: Purchase investment in bonds for $111,000. Sell land costing $36,000 for only $27,400, resulting in a $8,600 loss on sale of land. Purchase $66,000 in equipment by issuing a $66,000 long-term note payable to the seller. No cash is exchanged in the transaction. Declare and pay a cash dividend of $28,000.   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.)

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question

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       $ 3,436,000  
Expenses:            
Cost of goods sold $ 2,250,000        
Operating expenses   918,000        
Depreciation expense   33,000        
Loss on sale of land   8,600        
Interest expense   18,000        
Income tax expense   54,000        
Total expenses         3,281,600  
Net income       $ 154,400  
 

 

VIDEO PHONES, INC.
Balance Sheets
December 31
  2021   2020  
Assets                
Current assets:                
Cash $ 267,160     $ 194,280    
Accounts receivable   87,600       66,000    
Inventory   105,000       141,000    
Prepaid rent   13,440       6,720    
Long-term assets:                
Investments   111,000       0    
Land   216,000       252,000    
Equipment   282,000       216,000    
Accumulated depreciation   (76,200 )     (43,200 )  
Total assets $ 1,006,000     $ 832,800    
Liabilities and Stockholders' Equity                
Current liabilities:                
Accounts payable $ 71,400     $ 87,000    
Interest payable   6,600       11,200    
Income tax payable   15,600       14,600    
Long-term liabilities:                
Notes payable   297,000       231,000    
Stockholders' equity:                
Common stock   360,000       360,000    
Retained earnings   255,400       129,000    
Total liabilities and stockholders’ equity $ 1,006,000     $ 832,800    
 

 

Additional Information for 2021:

  1. Purchase investment in bonds for $111,000.
  2. Sell land costing $36,000 for only $27,400, resulting in a $8,600 loss on sale of land.
  3. Purchase $66,000 in equipment by issuing a $66,000 long-term note payable to the seller. No cash is exchanged in the transaction.
  4. Declare and pay a cash dividend of $28,000.

 

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.)

 

 

 

 

 
 
 
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps with 1 images

Blurred answer
Knowledge Booster
Financial Reporting in Hyperinflationary Economies
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education