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Accounting

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

VIRTUAL GAMING SYSTEMS Income Statement For the year ended December 31, 2012
Revenues		$	3,100,000
Gain on sale of land			2,700

Total revenues			3,102,700
Expenses:
Cost of goods sold	$ 1,680,000
Operating expenses	608,000
Depreciation expense	23,700
Interest expense	24,700
Income tax expense	70,400

Total expenses			2,406,800

Net income		$	695,900

VIRTUAL GAMING SYSTEMS Balance Sheet December 31
	2012	2011
Assets
Current assets:
Cash	$ 667,100	$ 146,000
Accounts receivable	82,000	94,000
Inventory	148,000	140,000
Prepaid rent	4,500	6,500
Long-term assets:
Investments	188,000	110,000
Land	214,000	260,000
Equipment	234,000	213,000
Accumulated depreciation	(132,700)	(109,000)

Total assets	$ 1,404,900	$ 860,500

Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$ 34,000	$ 93,000
Interest payable	4,700	3,200
Income tax payable	21,000	29,000
Long-term liabilities:
Notes payable	251,000	230,000
Stockholders' equity:
Common stock	343,000	290,000
Retained earnings	751,200	215,300

Total liabilities and stockholders' equity	$ 1,404,900	$ 860,500

Additional Information for 2012:
1.	Purchase additional investment in stocks for $78,000.
2.	Sell land costing $46,000 for $48,700, resulting in a $2,700 gain on sale of land.
3.	Purchase $21,000 in equipment by borrowing $21,000 with a note payable due in three years. No cash is exchanged in the transaction.
4.	Declare and pay a cash dividend of $160,000.
5.	Issue common stock for $53,000.

Required:

Prepare the statement of cash flows using the indirect method. Disclose any noncash transactions in an accompanying note. (Amounts to be deducted should be indicated with minus sign. Omit the "$" sign in your response.)

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Financial Accounting, Accounting

Category:- Financial Accounting
Reference No.:- M91570012

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