Data for Virtual Gaming Systems are provided in P11–4B.

Required:

Prepare the statement of cash flows for Virtual Gaming Systems using the direct method. Disclose any noncash transactions in an accompanying note.

P11–4B

Additional Information for 2021:

1. Purchase additional investment in stocks for $95,000.

2. Sell land costing $55,000 for $62,000, resulting in a $7,000 gain on sale of land.

3. Purchase $30,000 in equipment by issuing a $30,000 long-term note payable to the seller. No cash is exchanged in the transaction.

4. Declare and pay a cash dividend of $120,000.

5. Issue common stock for $60,000.

Transcribed Image Text:

VIRTUAL GAMING SYSTEMS Income Statement For the year ended December 31, 2021 $2,600,000 7,000 Net sales Gain on sale of land Total revenues 2,607,000 Expenses: Cost of goods sold Operating expenses Depreciation expense $1,650,000 615,000 33,000 Interest expense 34,000 Income tax expense 80,000 Total expenses 2,412,000 $ 195,000 Net income