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The income statement, balance sheets, and additional information for Video Phones, Inc., are provided. VIDEO PHONES, INC. Income Statement For the Year Ended December 31, 2021 Net sales $3,636,000 Expenses: Cost of goods sold $2,450,000 Operating expenses 958,000 Depreciation expense 37,000 Loss on sale of land 9,000 Interest expense 20,000 Income tax expense 58,000 Total expenses 3,532,000 Net income $ 194,000 VIDEO PHONES, INCH Balance Sheets December 31 2021 2020 $ 254,600 92,000 105,000 14,400 $227,800 70,000 145,000 7,200 Assets Current assets: Cash Accounts receivable Inventory Prepaid rent Long-term assets: Investments Land Equipment Accumulated depreciation 115,000 220,000 290,000 (81.000) 1 AA AAA 0 260,000 220,000 (44,000) CARRARA 2021 2020 $227,800 70,000 145,000 7,200 VIDEO PHONES, INC. Balance Sheets December 31 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 $ 254,600 92,000 105,000 14,400 115,000 220,000 290,000 (81,000) $1,010,000 @ 260,000 220,000 (44,000) $886,000 $ 75,000 7,000 16,000 $ 91,000 12,000 15,000 305,000 235,000 400,000 207,000 $1,010,000 400,000 133,000 $886,000 Additional Information for 2021: Check my work 1. Purchase investment in bonds for $115,000. 2. Sell land costing $40,000 for only $31,000, resulting in a $9,000 loss on sale of land. 3. Purchase $70,000 in equipment by issuing a $70,000 long-term note payable to the seller. No cash is exchanged in the transaction 4. Declare and pay a cash dividend of $30,000. 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.) $ 104.000 VIDEO PHONES, INC. 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 Loss (on sale of land) Increase in accounts receivable Increase in prepaid rent Decrease in inventory Decrease in accounts payable Decrease in interest payable Increase in income tax payable 37,000 9,000 Check my work Gyep R Decrease in inventory Decrease in accounts payable Decrease in interest payable Increase in income tax payable $ 150,000 Net cash flows from operating activities Cash Flows from Investing Activities: Purchase of equipment Gain (on sale of land) 0 Net cash flows from investing activities Cash Flows from Financing Activities: Payment of cash dividends Net cash flows from financing activities Not increase in cash Cash at the beginning of the period Cash at the end of the period Note: Noncash Activities Purchase investment in bonds $ 0