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					$	2,570,000
Gain on sale of land						5,500
Total revenues						2,575,500
Expenses:
Cost of goods sold	$	1,635,000
Operating expenses		612,000
Depreciation expense		30,000
Interest expense		31,000
Income tax expense		77,000
Total expenses						2,385,000
Net income					$	190,500

VIRTUAL GAMING SYSTEMS Balance Sheets December 31
	2021				2020
Assets
Current assets:
Cash	$	343,380			$	280,860
Accounts receivable		67,300				83,000
Inventory		155,500				142,000
Prepaid rent		4,420				6,840
Long-term assets:
Investments		202,000				110,000
Land		213,500				267,000
Equipment		244,000				217,000
Accumulated depreciation		(138,500	)			(108,500	)
Total assets	$	1,091,600			$	998,200
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	33,500			$	95,000
Interest payable		4,800				3,700
Income tax payable		23,800				27,500
Long-term liabilities:
Notes payable		259,000				232,000
Stockholders' equity:
Common stock		427,000				370,000
Retained earnings		343,500				270,000
Total liabilities and stockholders equity	$	1,091,600			$	998,200

Additional Information for 2021:

1. Purchase additional investment in stocks for $92,000.

2. Sell land costing $53,500 for $59,000, resulting in a $5,500 gain on sale of land.

3. Purchase $27,000 in equipment by issuing a $27,000 long-term note payable to the seller. No cash is exchanged in the transaction.

4. Declare and pay a cash dividend of $117,000.

5. Issue common stock for $57,000.

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.)