The income statement, balance sheets, and additional information for Video Phones, Inc., are provided.

VIDEO PHONES, INC.Income StatementFor the Year Ended December 31, 2021Net sales$2,756,000Expenses:Cost of goods sold$1,700,000Operating expenses808,000Depreciation expense22,000Loss on sale of land7,500Interest expense12,500Income tax expense43,000Total expenses2,593,000Net income$163,000

VIDEO PHONES, INC.Balance SheetsDecember 3120212020AssetsCurrent assets:Cash$172,900$102,700Accounts receivable75,50055,000Inventory105,000130,000Prepaid rent9,6004,800Long-term assets:Investments100,0000Land205,000230,000Equipment260,000205,000Accumulated depreciation(63,000)(41,000)Total assets$865,000$686,500Liabilities and Stockholders' EquityCurrent liabilities:Accounts payable$61,500$76,000Interest payable5,5009,000Income tax payable14,50013,500Long-term liabilities:Notes payable275,000220,000Stockholders' equity:Common stock250,000250,000Retained earnings258,500118,000Total liabilities and stockholders' equity$865,000$686,500

Additional Information for 2021:

1. Purchase investment in bonds for $100,000.
2. Sell land costing $25,000 for only $17,500, resulting in a $7,500 loss on sale of land.
3. Purchase $55,000 in equipment by issuing a $55,000 long-term note payable to the seller. No cash is exchanged in the transaction.
4. Declare and pay a cash dividend of $22,500.

Required:

Prepare the statement of cash flows using theindirectmethod. Disclose any noncash transactions in an accompanying note.(List cash outflows and any decrease in cash as negative amounts.)