The income statement, balance sheets, and additional information for Virtual Gaming Systems are provided.

Additional Information for 2021:

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 issuing a $30,000 long-term note payable to the seller. No cash is exchanged in the transaction.

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.

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VIRTUAL GAMING SYSTEMS Income Statement For the year ended December 31, 2021 $2,600,000 7,000 2,607,000 Net sales Gain on sale of land Total revenues Expenses: Cost of goods sold $1,650,000 Operating expenses 615,000 Depreciation expense 33,000 Interest expense 34,000 Income tax expense 80,000 Total expenses 2,412,000 Net income $ 195,000