Question

The income statement, balance sheets, and additional information for Virtual Gaming Systems are provided.

   

VIRTUAL GAMING SYSTEMS Income Statement For the Year Ended December 31, 2018
Net sales		$	2,540,000
Gain on sale of land			4,000
Total revenues			2,544,000
Expenses:
Cost of goods sold	$ 1,620,000
Operating expenses	609,000
Depreciation expense	27,000
Interest expense	28,000
Income tax expense	74,000
Total expenses			2,358,000
Net income		$	186,000

  

VIRTUAL GAMING SYSTEMS Balance Sheets December 31
	2018		2017
Assets
Current assets:
Cash	$	277,260	$	217,920
Accounts receivable		70,600		86,000
Inventory		151,000		139,000
Prepaid rent		4,240		6,480
Long-term assets:
Investments		199,000		110,000
Land		212,000		264,000
Equipment		238,000		214,000
Accumulated depreciation		(134,000)		(107,000)
Total assets	$	1,018,100	$	930,400
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	32,000	$	92,000
Interest payable		4,500		3,400
Income tax payable		22,600		26,000
Long-term liabilities:
Notes payable		253,000		229,000
Stockholders' equity:
Common stock		394,000		340,000
Retained earnings		312,000		240,000
Total liabilities and stockholders’ equity	$	1,018,100	$	930,400

Additional Information for 2018:

1. Purchase additional investment in stocks for $89,000.

2. Sell land costing $52,000 for $56,000, resulting in a $4,000 gain on sale of land.

3. Purchase $24,000 in equipment by borrowing $24,000 with a note payable due in three years. No cash is exchanged in the transaction.

4. Declare and pay a cash dividend of $114,000.

5. Issue common stock for $54,000.

VIRTUAL GAMING SYSTEMS Statement of Cash Flows For the Year Ended December 31, 2018 Cash Flows from Operating Activities Adjustments to reconcile net income to net 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 of the period Cash at the end of the period Note: Noncash Activities

Answer 1