The income statement, balance sheets, and additional information for Communication Accessories are provided. COMMUNICATION ACCESSORIES Income Statement For the Year Ended December 31, 2021 Revenues $2,800,000 Gain on sale of land 4,000 Total revenues 2,804,000 Expenses: Cost of goods sold $1,900,000 Operating expenses 575,000 Depreciation expense 38,000 Interest expense 16,000 Income tax expense 63,000 Total expenses 2,592,000 Net income $ 212,000 48 COMMUNICATION ACCESSORIES Balance Sheets December 31 2021 2020 Assets Current assets: Cash Accounts receivable Inventory Prepaid rent $ 182,000 83,000 121,000 7.000 $ 187,000 95,000 138,000 5.000 HIP COMMUNICATION ACCESSORIES Balance Sheets December 31 2021 2020 $ 182,000 83,000 121,000 7,000 $ 187,000 95,000 138,000 5,000 26 Assets Current assets: Cash Accounts receivable Inventory Prepaid rent Long-term assets: Investment in stock 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 195,000 230,000 305,000 (138,000) $ 985,000 100,000 260,000 225,000 (100,000) $ 910,000 $ 40,000 1,000 12,000 $ 58,000 2,000 10,000 285,000 205,000 350,000 297,000 $ 985,000 350,000 285,000 $ 910,000 Saved Help Save & Exit Subr Additional Information for 2021: 1. Purchase additional investment in stocks for $95.000 2. Sell land costing $30,000 for $34,000 resulting in a $4,000 gain on sale of land. 3. Purchase $80,000 in equipment by borrowing $80,000 with a note payable due in three years. No cash is exchanged in the transaction. 4. The company declares and pays a cash dividend of $200,000. 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.) COMMUNICATION ACCESSORIES Statement of Cash Flows For the Year Ended December 31, 2021 Cash Flows from Operating Activities Adjustments to reconcile net income to net cash flows from operating activities: DO Prev 23 of 23 Next >