Problem 11-4B Prepare a statement of cash flows-indirect method (LO11-2, 11-3)

The income statement, balance sheets, and additional information for Virtual Gaming Systems are provided.

value 1. 2.00 points Problem 11-4B Prepare a statement of cash flows-indirect method (LO11-2, 11-3) 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, 2018 Net sales $ 2,600,000 Gain on sale of land 7,000 2,607,000 Total revenues Expenses Cost of goods sold Operating expenses Depreciation expense Interest expense Income tax expense $1,650 000 615,000 33,000 34,000 80,000 Tolal expenses 2,412,000 Net income $ 195,000 VIRTUAL GAMING SYSTEMS Balance Sheets December 31 2018 2017 S Assets Current assets. Cash Accounts receivable Inventory Prepaid rent Long-term assets: Investments Land Equipment Accumulated depreciation 409,500 64,000 160,000 4,600 343,800 80 000 145 000 7.200 205,000 215,000 250,000 (143 000) 110,000 270.000 220.000 (110,000) Total assets $ 1,165,100 5 1,066,000 35,000 $ 5,100 25000 98,000 4.000 29 000 Liabilities and Stockholders' Equity Current liabilities Accounts payable Interest payable Income tax payable Long-term liabilities: Notes payable Stockholders' equity Common stock Retained earnings 265,000 235,000 460,000 375,000 400,000 300,000 Tolal liabilities and stockholders' equily $ 1,165,100 $ 1,066,000 Additional Information for 2018: 1. Purchase additional Investment in stocks for $95.000. 2. Sell land costing $55,000 for $62,000, resulting in a $7,000 gain on sale of land. 3. Purchase $30,000 in equipment by issuing a $30,000 long-term note payable to the seller. No cash is exchanged in the transa 4. Declare and pay a cash dividend of $120,000. 5. Issue common stock for $60.000. Required: Prepare the statement of cash flows using the indirect method. Disclose any noncash transactions in an accompanying note. (Li VIRTUAL GAMING SYSTEMS Statement of Cash Flows For the Year Ended December 31, 2018 Cash Flows from Operating Activities Nel income rs 195,000 Adjustments to reconcile net income to net cash flows from operating activities: Depreciation expense 33,000 Gain (on sale of land) Decrease in accounts receivable (7,000) Increase in inventory Decrease in prepaid rent Decrease in accounts payable Increase in interest payable Decrease in income tax payable $ 221,000 Net cash flows from operating activities Cash Flows from Investing Activities Purchase investment in stock Sale of land $ 221,000 Nel cash flows from operating activities Cash Flows from Investing Activities Purchase investment in stock Sale of land Net cash flows from investing activities Cash Flows from Financing Activities Issue common stock Paynent of cash dividends Net cash flows from financing activities Net increase in cash Cash al the beginning of the period Cash at the end of the period Note: Noncash Activities Purchase equipment issuing a note payable References eBook & Resources