Problem 11-4B (Algo) Prepare a statement of cash flows-indirect method (LO11-2, 11-3, 11-4, 11-5) The income statement, balance sheets, and additional information for Virtual Gaming Systems are provided. VIRTUAL GAMING SYSTEMS Income Statement For the Year Ended December 31, 2024 Net sales Gain on sale of land $2,530,000 3,500 Total revenues Expenses: Cost of goods sold Operating expenses Depreciation expense Interest expense Income tax expense Total expenses 2,533,500 $1,615,000 608,000 26,000 27,000 73,000 Net income 2,349,000 $184,500 Assets Current assets: Cash Accounts receivable Inventory Prepaid rent Long-term assets: Investments Land Equipment VIRTUAL GAMING SYSTEMS Balance Sheets December 31 2024 2023 $265,120 71,700 $206,940 87,000 149,500 138,000 4,180 6,360 188,000 100,000 211,500 263,000 236,000 213,000 www 2024 2023 Assets Current assets: Cash Accounts receivable Inventory Prepaid rent Long-term assets: Investments Land $265,120 71,700 $206,940 149,500 87,000 138,000 4,180 6,360 188,000 100,000 211,500 263,000 Equipment 236,000 213,000 Accumulated depreciation (132,500) (106,500) Total assets $993,500 $907,800 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $31,500 $91,000 Interest payable 4,300 3,300 Income tax payable Long-term liabilities: Notes payable Stockholders' equity: Common stock Retained earnings Total liabilities and stockholders' equity 22,200 25,500 251,000 228,000 383,000 330,000 301,500 230,000 $993,500 $907,800 Additional Information for 2024: 1. Purchased additional investment in stocks for $88,000. 2. Sold land for $55,000. The land originally was purchased for $51,500, resulting in a $3,500 gain being recorded at the time of the sale. 3. Purchased $23,000 in equipment by issuing a $23,000 long-term note payable to the seller. No cash was exchanged in the transaction. 4. Declared and paid a cash dividend of $113,000. 5. Issued common stock for $53,000. Required: Prepare the statement of cash flows using the indirect method. Disclose any noncash transactions in an accompanying note. (Amounts to be deducted, cash outflows, and any decrease in cash should be indicated with a minus sign.) Cash Flows from Operating Activities: VIRTUAL GAMING SYSTEMS Statement of Cash Flows For the Year Ended December 31, 2024 Adjustments to reconcile net income to net cash flows from operating activities: Net cash flows from operating activities Cash Flows from Investing Activities: 25 Net cash flows from operating activities Cash Flows from Investing Activities: Net cash flows from investing activities Cash Flows from Financing Activities: Net cash flows from financing activities. Cash at the beginning of the period Cash at the end of the period Note: Noncash Activities