Problem 11-4B Prepare a statement of cash flowsindirect 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, 2021
Net sales					$	2,430,000
Gain on sale of land						6,500
Total revenues						2,436,500
Expenses:
Cost of goods sold	$	1,565,000
Operating expenses		598,000
Depreciation expense		16,000
Interest expense		17,000
Income tax expense		63,000
Total expenses						2,259,000
Net income					$	177,500

VIRTUAL GAMING SYSTEMS Balance Sheets December 31
	2021				2020
Assets
Current assets:
Cash	$	81,420			$	25,740
Accounts receivable		68,700				83,000
Inventory		134,500				128,000
Prepaid rent		2,980				4,560
Long-term assets:
Investments		198,000				120,000
Land		208,500				255,000
Equipment		216,000				203,000
Accumulated depreciation		(117,500	)			(101,500	)
Total assets	$	792,600			$	717,800
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	26,500			$	81,000
Interest payable		3,400				2,300
Income tax payable		30,200				32,500
Long-term liabilities:
Notes payable		255,000				242,000
Stockholders' equity:
Common stock		273,000				230,000
Retained earnings		204,500				130,000
Total liabilities and stockholders equity	$	792,600			$	717,800

Additional Information for 2021:

1. Purchase additional investment in stocks for $78,000.

2. Sell land costing $46,500 for $53,000, resulting in a $6,500 gain on sale of land.

3. Purchase $13,000 in equipment by issuing a $13,000 long-term note payable to the seller. No cash is exchanged in the transaction.

4. Declare and pay a cash dividend of $103,000.

5. Issue common stock for $43,000.

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.)

VIRTUAL GAMING SYSTEMS Balance Sheets December 31 2021 2020 Assets Current assets: Cash $ $ 81,420 68,700 134,500 2,980 25,740 83,000 128,000 4,560 198,000 208,500 216,000 (117,500) $ 792,600 120,000 255,000 203,000 (101,500) $ 717,800 Accounts receivable Inventory Prepaid rent Long-term assets: Investments 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 $ $ 26,500 3,400 30, 200 81,000 2,300 32,500 255,000 242,000 273,000 204,500 $ 792,600 230,000 130,000 $ 717,800 Additional Information for 2021: 1. Purchase additional investment in stocks for $78,000. 2. Sell land costing $46,500 for $53,000, resulting in a $6,500 gain on sale of land. 3. Purchase $13,000 in equipment by issuing a $13,000 long-term note payable to the seller. No cash is exchanged in the transaction. 4. Declare and pay a cash dividend of $103,000. 5. Issue common stock for $43,000. 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.) Additional Information for 2021: 1. Purchase additional investment in stocks for $78,000 2. Sell land costing $46,500 for $53,000, resulting in a $6,500 gain on sale of land. 3. Purchase $13,000 in equipment by issuing a $13,000 long-term note payable to the seller. No cash is exchanged in the transaction. 4. Declare and pay a cash dividend of $103,000. 5. Issue common stock for $43,000. 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.) VIRTUAL GAMING SYSTEMS Statement of Cash Flows For the Year Ended December 31, 2021 Cash Flows from Operating Activities Adjustments to reconcile net income to net cash flows from operating activities: 0 Net cash flows from operating activities Cash Flows from Investing Activities Statement of Cash Flows For the Year Ended December 31, 2021 Cash Flows from Operating Activities Adjustments to reconcile net income to net cash flows from operating activities: $ 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 0 Cash at the beginning of the period Cash at the end of the period Note: Noncash Activities