11-4A Prepare a statement of cash flows-indirect method (LO11-2, 11-3, 11-4, 11-5) The income statement, balance sheets, and additional information for Video Phones, Inc., are provided. Net sales Expenses: VIDEO PHONES, INC. Income Statement For the Year Ended December 31, 2021 Cost of goods sold Operating expenses Depreciation expense Loss on sale of land Interest expense Income tax expense Total expenses Net income) $1,850,000 838,000 25,000 7,800 14,000 46,000 $2,936,000 2,780,800 $ 155,200 VIDEO PHONES, INC. Balance Sheets December 31 Assets Current assets: Cash Accounts receivable Inventory Prepaid rent Long-term assets: Investments Land Equipment Accumulated depreciation Total assets Liabilities and Stockholders' Equity 2021 2020 $193,480 78,800 $127,840 58,000 105,000 133,000 10,320 5,160 103,000 0 208,000 236,000 266,000 208,000 (66,600) (41,600) $898,000 $726,400 Total assets Liabilities and Stockholders' Equity Current liabilities Accounts payable Interest payable Income tax payable Long-term liabilities: Notes payable Stockholders' equity: Common stock Retained earnings $ 64,200 5,800 14,800 $ 79,000 9,600 13,800 281,000 223,000 280,000 280,000 252,200 121,000 Total liabilities and stockholders' equity $898,000 $726,400 Additional Information for 2021: 1. Purchase investment in bonds for $103,000. 2. Sell land costing $28,000 for only $20,200, resulting in a $7,800 loss on sale of land. 3. Purchase $58,000 in equipment by issuing a $58,000 long-term note payable to the seller. No cash is exchanged in the transaction 4. Declare and pay a cash dividend of $24,000. 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.) Cash Flows from Operating Activities Net income Answer is not complete. VIDEO PHONES, INC. Statement of Cash Flows For the Year Ended December 31, 2021 Adelmants in ranne net inname to not resh from nationa 155.200 Cash Flows from Operating Activities: Net income Answer is not complete. VIDEO PHONES, INC. Statement of Cash Flows For the Year Ended December 31, 2021 Adjustments to reconcile net income to net cash flows from operating activities: Increase in income tax payable Depreciation expense Loss (on sale of land) Decrease in inventory Increase in income tax payable Increase in prepaid rent Decrease in accounts payable Decrease in interest payable Net cash flows from operating activities Cash Flows from Investing Activities: Purchase investment in bonds Proceeds from sale of land Purchase investment in bonds Net cash flows from investing activities Cash Flows from Financing Activities: Payment of cash dividends 000 155,200 460,000 25,000 7,800 45,000 28,000 (20,800) (5,160) (14,800) (3,800) (103,000) ( 20,200 (82,800) $ 676,440 (165,600) $ (24,000) Depreciation expense Loss (on sale of land) Decrease in inventory Increase in income tax payable Increase in prepaid rent 25,000 7,800 45,000 28,000 (20,800) (5,160) Decrease in accounts payable (14,800) Decrease in interest payable (3,800) Net cash flows from operating activities $ 676,440 Cash Flows from Investing Activities: Purchase investment in bonds (103,000) ( Proceeds from sale of land 20,200 Purchase investment in bonds (82,800) Net cash flows from investing activities (165,600) Cash Flows from Financing Activities: Payment of cash dividends $ (24,000) Net cash flows from financing activities Net increase in cash Cash at the beginning of the period Cash at the end of the period Note: Noncash Activities (24,000) 65,640 65,640 193,480