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				$	3,636,000
Expenses:
Cost of goods sold	$	2,450,000
Operating expenses		958,000
Depreciation expense		37,000
Loss on sale of land		9,000
Interest expense		20,000
Income tax expense		58,000
Total expenses					3,532,000
Net income				$	104,000

VIDEO PHONES, INC.
Balance Sheets
December 31
	2021				2020
Assets
Current assets:
Cash	$	254,600			$	227,800
Accounts receivable		92,000				70,000
Inventory		105,000				145,000
Prepaid rent		14,400				7,200
Long-term assets:
Investments		115,000				0
Land		220,000				260,000
Equipment		290,000				220,000
Accumulated depreciation		(81,000	)			(44,000	)
Total assets	$	1,010,000			$	886,000
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	75,000			$	91,000
Interest payable		7,000				12,000
Income tax payable		16,000				15,000
Long-term liabilities:
Notes payable		305,000				235,000
Stockholders' equity:
Common stock		400,000				400,000
Retained earnings		207,000				133,000
Total liabilities and stockholders equity	$	1,010,000			$	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. (List cash outflows and any decrease in cash as negative amounts.)