The income statement, balance sheets, and additional information for Virtual Gaming Systems are provided. VIRTUAL GAMING SYSTEMS Income Statement For the Year Ended December 31, 2018 Net sales Gain on sale of land $2,600,000 7.000 Total revenues 2,607,000 Cost of goods sold S 1,650,000 815,000 33,000 34,000 80,000 Interest expense Income tax expense Total expenses 2,412,000 Net income $ 195,000 VIRTUAL GAMING SYSTEMS Balance Sheets 2018 2017 Assets Current assets: Cash Accounts receivable Inventory Prepaid rent $ 409,500 S 343,800 80,000 145,000 7,200 84,000 160,000 4,600 Long-term assets: Land Equipment 205,000 215,000 250,000 110,000 270,000 220,000 (143.000) (110.000) Total assets $ 1,165.100 S 1,066,000 Liabilities and Stockholders' Equity Current liabilities: Accounts payable Interest payable Income tax $ 35,000 S 98,000 4,000 29,000 5,100 25,000 265,000 480,000 payable Notes payable 235,000 Stockholders' equity: Common stock Retained earnings 400,000 300,000 375,000 Total liabilities and stockholders' equity $ 1,165.100 S 1,066,000 Additional Information for 2018: 1. Purchase additional investment in stocks for $95,000 2. Sell land costing $55,000 for $62,000, resulting in a $7,000 gain on sale of land. 3. Purchase $30,000 in equipment by borowing $30,000 with a note payable due in three years. No cash is exchanged in the 4. Declare and pay a cash dividend of $120,000 5. Issue common stock for $60,000. 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.) VIRTUAL GAMING SYSTEMS Statement of Cash Flows For the Year Ended December 31, 2018 Cash Flows from Operating Activities Adjustments to reconcile net income to net cash flows from o 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 Cash at the beginning of the period Cash at the end of the period Note: Noncash Activities