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 $ 3,386,000 Expenses: Cost of goods sold $ 2,200,000 Operating expenses 908,000 Depreciation expense 32,000 Loss on sale of land 8,500 Interest expense 17,500 Income tax expense 53,000 Total expenses 3,219,000 Net income $ 167,000 VIDEO PHONES, INC. Balance Sheets December 31 2021 2020 Assets Current assets: Cash $ 270,300 $ 185,900 Accounts receivable 86,500 65,000 Inventory 105,000 140,000 Prepaid rent 13,200 6,600 Long-term assets: Investments 110,000 0 Land 215,000 250,000 Equipment 280,000 215,000 Accumulated depreciation (75,000 ) (43,000 ) Total assets $ 1,005,000 $ 819,500 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 70,500 $ 86,000 Interest payable 6,500 11,000 Income tax payable 15,500 14,500 Long-term liabilities: Notes payable 295,000 230,000 Stockholders' equity: Common stock 350,000 350,000 Retained earnings 267,500 128,000 Total liabilities and stockholders’ equity $ 1,005,000 $ 819,500 Additional Information for 2021: Purchase investment in bonds for $110,000. Sell land costing $35,000 for only $26,500, resulting in a $8,500 loss on sale of land. Purchase $65,000 in equipment by issuing a $65,000 long-term note payable to the seller. No cash is exchanged in the transaction. Declare and pay a cash dividend of $27,500. 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.)
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 $ 3,386,000 Expenses: Cost of goods sold $ 2,200,000 Operating expenses 908,000 Depreciation expense 32,000 Loss on sale of land 8,500 Interest expense 17,500 Income tax expense 53,000 Total expenses 3,219,000 Net income $ 167,000 VIDEO PHONES, INC. Balance Sheets December 31 2021 2020 Assets Current assets: Cash $ 270,300 $ 185,900 Accounts receivable 86,500 65,000 Inventory 105,000 140,000 Prepaid rent 13,200 6,600 Long-term assets: Investments 110,000 0 Land 215,000 250,000 Equipment 280,000 215,000 Accumulated depreciation (75,000 ) (43,000 ) Total assets $ 1,005,000 $ 819,500 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 70,500 $ 86,000 Interest payable 6,500 11,000 Income tax payable 15,500 14,500 Long-term liabilities: Notes payable 295,000 230,000 Stockholders' equity: Common stock 350,000 350,000 Retained earnings 267,500 128,000 Total liabilities and stockholders’ equity $ 1,005,000 $ 819,500 Additional Information for 2021: Purchase investment in bonds for $110,000. Sell land costing $35,000 for only $26,500, resulting in a $8,500 loss on sale of land. Purchase $65,000 in equipment by issuing a $65,000 long-term note payable to the seller. No cash is exchanged in the transaction. Declare and pay a cash dividend of $27,500. 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.)
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter5: The Income Statement And The Statement Of Cash Flows
Section: Chapter Questions
Problem 9E: Net Cash Flow from Operating Activities The following are accounting items taken from Tyrone...
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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 | $ | 3,386,000 | ||||
Expenses: | ||||||
Cost of goods sold | $ | 2,200,000 | ||||
Operating expenses | 908,000 | |||||
32,000 | ||||||
Loss on sale of land | 8,500 | |||||
Interest expense | 17,500 | |||||
Income tax expense | 53,000 | |||||
Total expenses | 3,219,000 | |||||
Net income | $ | 167,000 | ||||
VIDEO PHONES, INC. | ||||||||
Balance Sheets | ||||||||
December 31 | ||||||||
2021 | 2020 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash | $ | 270,300 | $ | 185,900 | ||||
86,500 | 65,000 | |||||||
Inventory | 105,000 | 140,000 | ||||||
Prepaid rent | 13,200 | 6,600 | ||||||
Long-term assets: | ||||||||
Investments | 110,000 | 0 | ||||||
Land | 215,000 | 250,000 | ||||||
Equipment | 280,000 | 215,000 | ||||||
Accumulated depreciation | (75,000 | ) | (43,000 | ) | ||||
Total assets | $ | 1,005,000 | $ | 819,500 | ||||
Liabilities and |
||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 70,500 | $ | 86,000 | ||||
Interest payable | 6,500 | 11,000 | ||||||
Income tax payable | 15,500 | 14,500 | ||||||
Long-term liabilities: | ||||||||
Notes payable | 295,000 | 230,000 | ||||||
Stockholders' equity: | ||||||||
Common stock | 350,000 | 350,000 | ||||||
267,500 | 128,000 | |||||||
Total liabilities and stockholders’ equity | $ | 1,005,000 | $ | 819,500 | ||||
Additional Information for 2021:
- Purchase investment in bonds for $110,000.
- Sell land costing $35,000 for only $26,500, resulting in a $8,500 loss on sale of land.
- Purchase $65,000 in equipment by issuing a $65,000 long-term note payable to the seller. No cash is exchanged in the transaction.
- Declare and pay a cash dividend of $27,500.
Prepare the statement of cash flows using the indirect method. Disclose any noncash transactions in an accompanying note. (List
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