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 $3,336,000 $2,150,000 898,000 31,000 0,400 17,000 52,000 3,156,400 $ 179,600 Assets Current assetas Cash Accounts receivable Inventory Prepaid rent Long-term assets Investments Land VIDEO PHONES, INC. Balance Sheets December 31 Equipment Accumulated depreciation Total assets Liabilities and stockholders' Equity Current liabilities: Accounts payable 2021 2020 $ 273,440 $177,520 85,400 64,000 105,000 139,000 12,960 6.480 109,000 214,000 248,000 278,000 214,000 (73,000) (42,000) $1,004,000 $806,200 Interest payable 69,600 6,400 $ 85,000 Income tax payable Long-term liabilities: Notes payable Stockholders' equity: 15,400 10,800 14,400 293,000 229,000 Common stock 340,000 340,000 Retained earnings 279,600 127,000 Total liabilities and stockholders' equity $1,004,000 $806, 200 Additional Information for 2021: 1. Purchase investment in bonds for $109,000. 2. Sell land costing $34,000 for only $25,600, resulting in a $8,400 loss on sale of land. 3. Purchase $64,000 in equipment by issuing a $64,000 long-term note payable to the seller. No cash is exchanged in the transaction. 4. Declare and pay a cash dividend of $27,000. 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 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: Depreciation expense Loss (on sale of land) Increase in prepaid rent Increase in accounts receivable Increase in income tax payable $ 179,600 31,000 8,400 + Net cash flows from operating activities Cash Flows from Investing Activities Proceeds from sale of land $ 219,000 Net cash flows from investing activities Cash Flows from Financing Activities: Payment of cash dividends Net cash flows from financing activities. Net increase in cash i Cash at the beginning of the period 0 0 Cash at the end of the period S 0 Note: Noncash Activities Purchase equipment issuing a note payable $ 64,000