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, 2018 Net sales $ 3,586,000 Expenses: Cost of goods sold $ 2,400,000 Operating expenses 948,000 Depreciation expense 36,000 Loss on sale of land 8,900 Interest expense 19,500 Income tax expense 57,000 Total expenses 3,469,400 Net income $ 116,600 VIDEO PHONES, INC. Balance Sheet December 31 2018 2017 Assets Current assets: Cash $ 257,740 $ 219,420 Accounts receivable 90,900 69,000 Inventory 105,000 144,000 Prepaid rent 14,160 7,080 Long-term assets: Investments 114,000 0 Land 219,000 258,000 Equipment 288,000 219,000 Accumulated depreciation (79,800) (43,800) Total assets $ 1,009,000 $ 872,700 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 74,100 $ 90,000 Interest payable 6,900 11,800 Income tax payable 15,900 14,900 Long-term liabilities: Notes payable 303,000 234,000 Stockholders' equity: Common stock 390,000 390,000 Retained earnings 219,100 132,000 Total liabilities and stockholders equity $ 1,009,000 $ 872,700 Additional Information for 2018: 1. Purchase investment in bonds for $114,000. 2. Sell land costing $39,000 for only $30,100, resulting in a $8,900 loss on sale of land. 3. Purchase $69,000 in equipment by borrowing $69,000 with a note payable due in three years. No cash is exchanged in the transaction. 4. Declare and pay a cash dividend of $29,500. 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.)
