use the direct method. and disclose any non cash transactions in an accompanying note

The income statement, balance sheets, and additional information for Video Phones, Inc., are provided. $3,486,000 VIDEO PHONES, INC. Income Statement For the Year Ended December 31, 2021 Net sales Expenses: Cost of goods sold $2,300,000 Operating expenses 928,690 Depreciation expense 34,000 Loss on sale of land 8,700 Interest expense 18,500 Income tax expense 55,000 Total expenses Net income 3,344,200 $141,800 VIDEO PHONES, INC. Balance Sheets December 31 2021 2020 $ 264,020 88,700 105,000 13,680 $ 202,660 67,200 142,000 6,840 Assets Current assets: Cash Accounts receivable Inventory Prepaid rent Long-term assets: Investments Land Equipment Accumulated depreciation Total assets Liabilities and Stockholders' Equity Current liabilities: Accounts payable 112,000 217,000 284,000 (27,400) $1,007,000 254,000 217,000 (43,400) 5846, 100 $ 72,300 $ 88,000