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

Additional Information for 2021:

1. Purchase investment in bonds for $115,000.

2. Sell land costing $40,000 for only $31,000, resulting in a $9,000 loss on sale of land.

3. Purchase $70,000 in equipment by issuing a $70,000 long-term note payable to the seller. No cash is exchanged in the transaction.

4. Declare and pay a cash dividend of $30,000.

Required:

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

VIDEO PHONES, INC. Income Statement For the year ended December 31, 2021 Net sales $3,636,000 Expenses: Cost of goods sold $2,450,000 Operating expenses 958,000 Depreciation expense 37,000 Loss on sale of land 9,000 Interest expense 20,000 Income tax expense 58,000 Total expenses 3,532,000 $ 104,000 Net income