Reference no: EM132792932

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 $2,936,000

Expenses: Cost of goods sold $1,850,000

Operating expenses 838,000

Depreciation expense 25,000

Loss on sale of land 7,800

Interest expense 14,000

Income tax expense 46,000

Total expenses 2,780,800

Net income $155,200

VIDEO PHONES, INC. Balance Sheets December 31 2021 2020

Assets Current assets: Cash $193,480 $127,840

Accounts receivable 78,800 58,000

Inventory 105,000 133,000

Prepaid rent 10,320 5,160

Long-term assets: Investments 103,000 0

Land 208,000 236,000

Equipment 266,000 208,000

Accumulated depreciation (66,600) (41,600)

Total assets $898,000 $726,400

Liabilities and Stockholders' Equity Current liabilities:

Accounts payable $64,200 $79,000

Interest payable 5,800 9,600

Income tax payable 14,800 13,800

Long-term liabilities: Notes payable 281,000 223,000

Stockholders' equity: Common stock 280,000 280,000

Retained earnings 252,200 121,000

Total liabilities and stockholders' equity $898,000 $726,400

Additional Information for 2021:

1. Purchase investment in bonds for $103,000.

2. Sell land costing $28,000 for only $20,200, resulting in a $7,800 loss on sale of land.

3. Purchase $58,000 in equipment by issuing a $58,000 long-term note payable to the seller. No cash is exchanged in the transaction.

4. Declare and pay a cash dividend of $24,000.

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.)