Problem 11-4A Prepare a statement of cash flowsindirect method (LO11-2, 11-3, 11-4, 11-5)

The income statement, balance sheets, and additional information for Video Phones, Inc., are provided.

VIDEO PHONES, INC.
Income Statement
For the Year Ended December 31, 2021
Net sales				$	2,456,000
Expenses:
Cost of goods sold	$	1,450,000
Operating expenses		758,000
Depreciation expense		17,000
Loss on sale of land		7,000
Interest expense		10,000
Income tax expense		38,000
Total expenses					2,280,000
Net income				$	176,000

VIDEO PHONES, INC.
Balance Sheets
December 31
	2021				2020
Assets
Current assets:
Cash	$	138,600			$	60,800
Accounts receivable		70,000				50,000
Inventory		105,000				125,000
Prepaid rent		8,400				4,200
Long-term assets:
Investments		95,000				0
Land		200,000				220,000
Equipment		250,000				200,000
Accumulated depreciation		(57,000	)			(40,000	)
Total assets	$	810,000			$	620,000
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	57,000			$	71,000
Interest payable		5,000				8,000
Income tax payable		14,000				13,000
Long-term liabilities:
Notes payable		265,000				215,000
Stockholders' equity:
Common stock		200,000				200,000
Retained earnings		269,000				113,000
Total liabilities and stockholders equity	$	810,000			$	620,000

Additional Information for 2021:

1. Purchase investment in bonds for $95,000.
2. Sell land costing $20,000 for only $13,000, resulting in a $7,000 loss on sale of land.
3. Purchase $50,000 in equipment by issuing a $50,000 long-term note payable to the seller. No cash is exchanged in the transaction.
4. Declare and pay a cash dividend of $20,000.

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.)