Problem 11-4B 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 2 $2,45e,eee 7,500 2,457,500 VIRTUAL GAMING SYSTEMS Income Statement For the year ended December 31, 2021 Net sales Gain on sale of land Total revenues Expenses: Cost of goods sold $1,575,000 Operating expenses 600,000 Depreciation expense 18,eee Interest expense 19, cee Income tax expense 65.eee Total expenses Net income 2,277.000 $ 180,500 VIRTUAL GAMING SYSTEMS Balance Sheets December 31 2021 2020 $ 139,40e 7e, see 137,500 $ 81,700 85, eee 138,000 4,860 3,100 Assets Current assets: Cash Accounts receivable Inventory Prepaid rent Long-term assets: Investments Land Equipment Accumulated depreciation Total assets Liabilities and Stockholders' Equity 182.ee 205,500 220,000 (120.see) $ 835. See 100, ese 253,000 205, ees (102, see) 5 757,eee 200 $ 81,7ee 85, eee 130,000 4,800 Assets Current assets: Cash 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 $ 139,400 70,500 137,500 3,100 180,000 205,500 22e,eee (120,5ee) $ 835,500 100,000 253,000 205,000 (102,5ee) $ 757,000 $ 27,500 3,5ee 29,000 $ 83, eee 2,500 31, see 255, eee 248, eee 295, eee 225,500 $ 835,50e 25e,eee 150, eee $ 757,600 Additional Information for 2021: 1. Purchase additional Investment in stocks for $80,000 2. Sell land costing $47,500 for $55,000, resulting in a $7,500 gain on sale of land, 3. Purchase $15,000 in equipment by issuing a $15,000 long-term note payable to the seller. No cash is exchanged in the transaction 4. Declare and pay a cash dividend of $105,000 5 Issue common stock for $45,000 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 Net income Adjustments to reconcile net income to net cash flows from operating activities Depreciation expense Gain (on sale of land) Decrease in accounts receivable Increase in inventory Decrease in prepaid rent Decrease in accounts payable Increase in interest payable Decrease in income tax payable 0 Net cash flows from operating activities Cash Flows from Investing Activities Purchase investment in stock Proceeds from sale of land 0 Net cash flows from investing activities Cash Flows from Financing Activities Issue common stock Payment of cash dividends 0 Net cash flows from financing activities Net increase in cash Cash at the beginning of the period Cash at the end of the period Note Noncash Activities S 0