Problem (0.5/each, total: 13 points) Video Phones, Inc. 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 (on sale of Land) in Accounts Receivable in Inventory in Prepaid Rent in Accounts Payable in Interest Payable in Income Tax Payable Net Cash Flows from Operating Activities Cash Flows from Investing Activities Purchase of Investments Sale of Land Net Cash Flows from Investing Activities Cash Flows from Financing Activities Payment of Cash Dividends Net Cash Flows from Financing Activities Net Increase (Decrease) in Cash Cash at the beginning of the period Cash at the end of the period Note: Noncash Activities Purchase Equipment Issuing a Note Payable VIDEO PHONES, INC. Income Statement For the year ended December 31, 2021 $3.636.000 Net sales Expenses: Cost of goods sold Operating expenses Depreciation expense Loss on sale of land Interest expense Income tax expense Total expenses Net income $2,450,000 958.000 37,000 9.000 20.000 58,000 3,532.000 $ 104.000 VIDEO PHONES, INC. Balance Sheets December 31 Page 586 2020 $ 227,800 70.000 145.000 7.200 2021 Assets Current assets: Cash $ 254.600 Accounts receivable 92,000 Inventory 105.000 Prepaid rent 14.400 Long-term assets: Investments 115.000 Land 220.000 Equipment 290.000 Accumulated depreciation (81,000) Total assets S1.010.000 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 75,000 Interest payable 7,000 Income tax payable 16,000 Long-term liabilities: Notes payable 305.000 Stockholders' equity: Common stock 400.000 Retained earnings 207.000 Total liabilities and stockholders' equity $1.010.000 260.000 220.000 (44,000) $ 886,000 $ 91,000 12.000 15,000 235.000 400.000 133.000 $ 886.000 Additional Information for 2021: 1. Purchase investment in bonds for $115,000. 2. Sell land costing $40,000 for only $31.000, resulting in a $9,000 loss on sale of land. 3. Purchase $70.000 in equipment by issuing a $70.000 long-term note payable to the seller. No cash is exchanged in the transaction. 4. Declare and pay a cash dividend of $30,000. Required: Prepare the statement of cash flows using the indirect method. Disclose any noncash transactions in an accompanying note. Video Phones, inc. Net sales Income statement Expenses: : $3,636,000 Cost of goods sold $2,450,000 openating Experies 958,000 Depreciation Expenses 37,000 Loss on sale of Land 9,000 Interest Expense 20,000 Income tax Expena 58,000 Total Expenses 3,532,000 $ 104,000 Net Income Video Phones, INC Balance Sheets December 31 2020 Inventory 7,200 0 Assets 2021 Current assets; cash $ 254,600 4227,800 Accounts relevable 92,000 70,000 105.000 145,000 Prepaid rent 14,400 Long-term assets: Investments 115,000 Land 220,000 260,000 Equipment 299 000 220,000 Accumulated supreciato 1 8 1,000)_ (44,000) Total assets $1,010,000 $386,000 Liabilities and stockholders' Equity Current liabilities: Accounts payable $ 75,000 $91,000 Interest Payable Income tax Long terum Riabilities: 7,000 22,000 payable 16,000 15,000 Notes Payable stock holders Equity! common stock 305,000 235,000 400,000 400,000 133.000 Retained Total liabilitus and stockholders' 1.000.000 BLS 000 Additional information for 2021 s. Purchase investment in bonds for $115,000 m. Purchase $ 70,000 in requipment wy poming a $70,000 Rong term bote payable to the seller, No cash is in the transaction 4. Declare and pay a cash dividend of $30,000 2. sell and costing $40,000 for only $37000, resulting in a $9,000 tosson sale of land exchanged