4 The income statement, balance sheets, and additional information for Video Phones, Inc., are provided. 1.75 points VIDEO PHONES, INC. Income Statement For the Year Ended December 31, 2021 Net sales $3,486,000 Expenses: Cost of goods sold $2,300,000 Operating expenses 928,000 Depreciation expense 34,000 Loss on sale of land 8,700 Interest expense 18,500 Income tax expense 55,000 Total expenses 3,344,200 Net income $ 141,800 References VIDEO PHONES, INC. Balance Sheets December 31 2021 2020 Assets Current assets: Cash Accounts receivable Inventory Prepaid rent Long-term assets: Investments Land Equipment Accumulated depreciation 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 Total liabilities and stockholders' equity $ 264,020 $ 202,660 88,700 67,000 105,000 142,000 13,680 6,840 112,000 0 217,000 254,000 284,000 217,000 (77,400 (43,400) $1,007,000 $846,100 $ 72,300 6,700 15, 700 $ 88,000 11,400 14,700 299,000 232,000 370,000 243,300 $1,007,000 370,000 130,000 $846,100 Additional Information for 2021: 1. Purchase investment in bonds for $112,000. 2. Sell land costing $37,000 for only $28,300, resulting in a $8,700 loss on sale of land. 3. Purchase $67,000 in equipment by issuing a $67,000 long-term note payable to the seller. No cash is exchanged in the transaction. 4. Declare and pay a cash dividend of $28,500. 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.) VIDEO PHONES, INC. Statement of Cash Flows For the Year Ended December 31, 2021 Cash Flows from Operating Activities: Adjustments to reconcile net income to net cash flows from operating activities: Net cash flows from operating activities Cash Flows from Investing Activities: Net cash flows from investing activities Cash Flows from Financing Activities: Net cash flows from financing activities Cash at the beginning of the period Cash at the end of the period Note: Noncash Activities