The income statement, balance sheet, and additional information for Virtual Gaming Systems are provided. VIRTUAL GAMING SYSTEMS Income Statement For the year ended December 31, 2012 Revenues $ 3,500,000 Gain on sale of land 2,200 Total revenues 3,502,200 Expenses: Cost of goods sold $ 1,640,000 Operating expenses 613,000 Depreciation expense 23,600 Interest expense 24,100 Income tax expense 70,000 Total expenses 2,370,700 Net income $ 1,131,500 VIRTUAL GAMING SYSTEMS Balance Sheet December 31 2012 2011 Assets Current assets: Cash $ 1,154,800 $ 153,000 Accounts receivable 79,000 94,000 Inventory 149,000 143,000 Prepaid rent 4,800 6,700 Long-term assets: Investments 188,000 110,000 Land 218,000 260,000 Equipment 231,000 214,000 Accumulated depreciation (132,600) (109,000) Total assets $ 1,892,000 $ 871,700 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 39,000 $ 95,000 Interest payable 4,800 3,000 Income tax payable 21,000 25,000 Long-term liabilities: Notes payable 248,000 231,000 Stockholders' equity: Common stock 260,000 210,000 Retained earnings 1,319,200 307,700 Total liabilities and stockholders' equity $ 1,892,000 $ 871,700 Additional Information for 2012: 1. Purchase additional investment in stocks for $78,000. 2. Sell land costing $42,000 for $44,200, resulting in a $2,200 gain on sale of land. 3. Purchase $17,000 in equipment by borrowing $17,000 with a note payable due in three years. No cash is exchanged in the transaction. 4. Declare and pay a cash dividend of $120,000. 5. Issue common stock for $50,000. Required: Prepare the statement of cash flows for Virtual Gaming Systems using the direct method. Disclose any noncash transactions in an accompanying note. (Amounts to be deducted should be indicated with minus sign. Omit the "$" sign in your response.) VIRTUAL GAMING SYSTEMS Statement of Cash Flows For the year ended December 31, 2012 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 $ Noncash Activities $