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The income statement, balance sheets, and additional information for Virtual Gaming Systems are provided. $2,400,000 9,000 2,409,000 VIRTUAL GAMING SYSTEMS Income Statement For the year ended December 31, 2021 Net sales Gain on sale of land Total revenues Expenses: Cost of goods sold $1,550,000 Operating expenses 595,000 Depreciation expense 13,000 Interest expense 14,000 Income tax expense 60,000 Total expenses Net income 2, 232,000 $ 177,000 VIRTUAL GAMING SYSTEMS Balance Sheets December 31 2021 2020 $ Assets Current assets: Cash Accounts receivable Inventory Prepaid rent Long-term assets: Investments Land Equipment Accumulated depreciation $ 107, 300 66,000 130,000 2.800 50,899 80,000 125,000 4,200 175,000 154,000 210,000 (113, 000) 100,000 199,000 200,000 (100, 000) 2,800 4,200 175,000 154,000 210,000 (113, 000) $ 732, 100 180,000 199,000 200,000 (100,000) $ 659,000 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 $ 25,000 3,100 32,000 $ 78,600 2,000 34,690 255,000 245,000 240,000 177,000 $ 732, 100 200,000 100,000 $ 659,000 Additional Information for 2021: 1. Purchase additional investment in stocks for $75.000. 2. Sell land costing $45,000 for $54,000, resulting in a $9.000 gain on sale of land. 3. Purchase $10,000 in equipment by issuing a $10,000 long-term note payable to the seller. No cash is exchanged in the transaction. 4. Declare and pay a cash dividend of $100,000 5. Issue common stock for $40,000 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.) 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.) $ 177,000 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: Depreciation expense Gain (on sale of land) Decrease in accounts receivable Increase in inventory Decrease in prepaid rent 13.000 19,000) 153,000 14.000 1.100 (2.000) Decrease in accounts payable Increase in interest payable Decrease in income tax payable 5,000 Net cash flows from operating activities Cash Flows from investing Activities Loss on sale of land) Purchase investment in stock Prey 1 of 1 !!! Score answer > Increase in interest payable Decrease in income tax payable 1,400 5.000 147,500 Net cash flows from operating activities Cash Flows from Investing Activities Loss (on sale of land) Purchase investment in stock Net cash flows from investing activities Cash Flows from Financing Activities Purchase investment in stock Net cash flows from financing activities Cash at the beginning of the period Cash at the end of the period Note: Noncath Activities Purchase equipment issuing a note payable