The income statement, balance sheet, and additional information for Video Phones
ID: 2470505 • Letter: T
Question
The income statement, balance sheet, and additional information for Video Phones, Inc., are provided.
Purchase $56,000 in equipment by borrowing $56,000 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.
VIDEO PHONES, INC.Income Statement
For the Year Ended December 31, 2015 Net sales $ 2,816,000 Expenses: Cost of goods sold $ 1,750,000 Operating expenses 818,000 Depreciation expense 23,000 Loss on sale of land 7,600 Interest expense 13,000 Income tax expense 44,000 Total expenses 2,655,600 Net income $ 160,400
Explanation / Answer
Depreciation would be considered as Non Cash activity.
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