The income statement, balance sheet, and additional information for Video Phones
ID: 2489686 • Letter: T
Question
The income statement, balance sheet, and additional information for Video Phones, Inc., are provided.
Purchase $53,000 in equipment by borrowing $53,000 with a note payable due in three years. No cash is exchanged in the transaction.
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.)
The income statement, balance sheet, and additional information for Video Phones, Inc., are provided.
Explanation / Answer
There has been a non cash transaction where $530000 equipment is purchased against $53000 Notes payable.
Cash Flow Statement Cash flows from operating activities working Receipts Collections From Customers 2,615,700.00 Collections From Customers=Net sales-Increase in accounts Receivable Total Cash Receipts 2,615,700.00 2636000-(73300-53000) 2615700 Payments Payments Of Accounts Payable (1,591,300.00) Payment to suppliers=COGS-Decrease in Inventory+Decrease in Accounts Payable Payment of Opearting expenses (792,560.00) 1600000-(128000-105000)+(74000-59700) 1591300 Payment of Interest (14,800.00) Cash paid for Interest=Interest expense+decrease in Interest Expense payable 11500+(8600-5300) 14800 Payment of Income Tax (40,000.00) Income Tax paid=Income tax payable-Increase in income tax payable Total Cash Payments (2,438,660.00) 41000-(14300-13300) 40000 Net cash from operating activities 177,040.00 Payment of Opearting expenses=Operating expenses+ Increase in Prepaid expenses 788000+(9120-4560) 792560 Cash flows from investing activities Sale of land 15700 Purchase of Investment in Bond -98000 Net cash used in investing activities (82,300.00) Cash flows from financing activities Payments of dividend -21500 Net cash used in financing activities (21,500.00) Net increase in cash and cash equivalents 73,240.00 Cash and cash equivalents at beginning of period 85,940.00 Cash and cash equivalents at end of period 159,180.00Related Questions
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