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, 2018 Net sales $ 3,236,000 Expenses: Cost of goods sold $ 2,100,000 Operating expenses 888,000 Depreciation expense 30,000 Loss on sale of land 8,300 Interest expense 16,500 Income tax expense 51,000

Total expenses 3,093,800

Net income $ 142,200

VIDEO PHONES, INC. Balance Sheet December 31 2018 2017 Assets Current assets: Cash $ 226,580 $ 169,140 Accounts receivable 84,300 63,000 Inventory 105,000 138,000 Prepaid rent 12,720 6,360 Long-term assets: Investments 108,000 0 Land 213,000 246,000 Equipment 276,000 213,000 Accumulated depreciation (72,600) (42,600)

Total assets $ 953,000 $ 792,900

Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 68,700 $ 84,000 Interest payable 6,300 10,600 Income tax payable 15,300 14,300 Long-term liabilities: Notes payable 291,000 228,000 Stockholders' equity: Common stock 330,000 330,000 Retained earnings 241,700 126,000

Total liabilities and stockholders equity $ 953,000 $ 792,900

Additional Information for 2018: 1. Purchase investment in bonds for $108,000. 2. Sell land costing $33,000 for only $24,700, resulting in a $8,300 loss on sale of land. 3. Purchase $63,000 in equipment by borrowing $63,000 with a note payable due in three years. No cash is exchanged in the transaction. 4. Declare and pay a cash dividend of $26,500.

Required: Prepare the statement of cash flows using the indirect method. Disclose any noncash transactions in an accompanying note.