3 The income statement, balance sheets, and additional information for Virtual Gaming Systems are provided. 3.75 points $2,600,000 7,000 2,607,000 VIRTUAL GAMING SYSTEMS Income Statement For the year ended December 31, 2821 Net sales Gain on sale of land Total revenues Expenses: Cost of goods sold $1,650,000 Operating expenses 615,000 Depreciation expense 33,000 Interest expense 34,000 Income tax expense 80,000 Total expenses Net income eBook Prim 2,412,000 $ 195,000 References VIRTUAL GAMING SYSTEMS Balance Sheets December 31 2021 2020 Assets Current assets $409,500 64.000 160,000 4.500 $343,800 30,000 145,000 7.200 205.000 215.000 250,000 (143 000) $1,165,100 110.000 270,000 220,000 (110,000 51,066,000 Accounts receivable Inventory Prepaid rent Long term assets Investments Land Equipent Accumulated depreciation Total assets Llabilities and stockholders' Equity Current abilities Accounts payable Interest payable Income tax payable Long terlalties Notes payable stockholders equity Contact Bandar Total Italities and stockholdersity 5 35, 5,100 35,000 50.000 4.000 25.000 265,000 235,000 400.000 335.000 $1,165,100 51,16.000 Additional Information for 2021: 1. Purchase additional investment in stocks for $95.000 2. Sell and costing $55,000 for $62,000, resulting in a $7000 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 Decare and pay a cash dividend of $120.000 5. Issue common stock for $60,000 Required: Prepare the statement of cash flows using the indirect method Duclose any noncash transactions in an accompanying note (List cash outflows and any decrease in cosh as negative amounts.) VIRTUAL GAMING SYSTEMS Statement of Cash Flows For the Year Ended December 31, 2021 Cash Flows from Operating Activities Net income Adjustments to reconcile net income to net cash flows from operating activities Gain (on sale of land) Depreciation expense Increase in interest payable $ 195.000 (7,000) 33,000 $ Net cash flows from operating activities Cash Flows from Investing Activities 221,000 0 Net cash flows from investing activities Cash Flows from Financing Activities Net cash flows from financing activities 0 Cash at the beginning of the period Cash at the end of the period Note: Noncash Activities $ 0