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				$	2,516,000
Expenses:
Cost of goods sold	$	1,500,000
Operating expenses		768,000
Depreciation expense		18,000
Loss on sale of land		7,100
Interest expense		10,500
Income tax expense		39,000
Total expenses					2,342,600
Net income				$	173,400

VIDEO PHONES, INC.
Balance Sheets
December 31
	2021				2020
Assets
Current assets:
Cash	$	145,460			$	69,180
Accounts receivable		71,100				51,000
Inventory		105,000				126,000
Prepaid rent		8,640				4,320
Long-term assets:
Investments		96,000				0
Land		201,000				222,000
Equipment		252,000				201,000
Accumulated depreciation		(58,200	)			(40,200	)
Total assets	$	821,000			$	633,300
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	57,900			$	72,000
Interest payable		5,100				8,200
Income tax payable		14,100				13,100
Long-term liabilities:
Notes payable		267,000				216,000
Stockholders' equity:
Common stock		210,000				210,000
Retained earnings		266,900				114,000
Total liabilities and stockholders’ equity	$	821,000			$	633,300

Additional Information for 2021:

1. Purchase investment in bonds for $96,000.
2. Sell land costing $21,000 for only $13,900, resulting in a $7,100 loss on sale of land.
3. Purchase $51,000 in equipment by issuing a $51,000 long-term note payable to the seller. No cash is exchanged in the transaction.
4. Declare and pay a cash dividend of $20,500.

Prepare the statement of cash flows for Video Phones, Inc., using the direct method. Disclose any noncash transactions in an accompanying note. (List cash outflows and any decrease in cash as negative amounts.)

Cash Flows From Operating Activities:
Net Cash Flows From Operating Activities
Cash Flows from Investing Activities:
Net Cash Flows From Investing Activities
Cash Flows From Financing Activities:
Net Cash Flows From Financing Activities
Cash at the beginning go the period
Cash at the end of the period
Note: None Cash Activities

Answer 1

Answer-

VIDEO PHONES INC.
STATEMENT OF CASH FLOWS (USING DIRECT METHOD)
FOR THE YEAR ENDED 31 DECEMBER,2021
Particulars		Amount
		$
Cash flow from operating activities
Cash received from customers	($2516000+$51000-$71100)	2495900
Cash paid for interest	($10500+$8200-$5100)	-13600
Cash paid for income taxes	($39000+$13100-$14100)	-38000
Cash paid for operating expenses	($768000-$4320+$8640)	-772320
Cash paid for merchandise	($1500000+$105000-$126000+$72000-$57900)	-1493100
Net cash flow from operating activities (a)		178880
Cash Flow from Investing activities
Land sold		13900
Investments purchased in bonds		-96000
Net cash Flow from Investing activities (b)		-82100
Cash Flow from Financing activities
Cash dividends paid		-20500
Net cash Flow from Financing activities (c)		-20500
Net Change in cash c=a+b+c		76280
Beginning cash balance		69180
Closing cash balance		145460
Schedule of non cash investing & financing activities
Issuance of long term note for equipment		$51000