indirect cash flow

COMMUNICATION ACCESSORIES Income Statement For the Year Ended December 31, 2021 Revenues $2,800,000 Gain on sale of land 4,000 Total revenues 2,804,000 Expenses: Cost of goods sold $1,900,000 Operating expenses 575,000 Depreciation expense 38,000 Interest expense 16,000 Income tax expense 63,000 Total expenses 2,592,000 Net income $ 212,000 COMMUNICATION ACCESSORIES Balance Sheets December 31 2021 2020 $ 182,000 83,000 121,000 7,000 $ 187,000 95,000 138,000 5,000 Assets Current assets: Cash Accounts receivable Inventory Prepaid rent Long-term assets: Investment in stock 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 195,000 230,000 305,000 (138,000) $ 985,000 100,000 260,000 225,000 (100,000) $ 910,000 $ $ 40,000 1,000 12,000 58,000 2,000 10,000 285,000 205,000 350,000 297,000 $ 985,000 350,000 285,000 $ 910,000 Additional Information for 2021: 1. Purchase additional investment in stocks for $95,000. 2. Sell land costing $30,000 for $34,000 resulting in a $4,000 gain on sale of land. 3. Purchase $80,000 in equipment by borrowing $80,000 with a note payable due in three years. No cash is exchanged in the transaction. 4. The company declares and pays a cash dividend of $200,000