Problem 11-7B Calculate operating activities-direct method (LO11-4, 11-5, 11-7) 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, 2021 Net sales $2,480,000 Gain on sale of land 4,000 Total revenues 2,484,000 Expenses: Cost of goods sold $1,590,000 Operating expenses 603,000 Depreciation expense 21,000 Interest expense 22,000 Income tax expense 68,000 Total expenses 2,304,000 Net income $ 180,000 VIRTUAL GAMING SYSTEMS Balance Sheets December 31 2021 2020 $ 183,520 73,200 142,000 3,280 $ 127,640 88,000 133,000 5,160 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 Interest payable Income tax payable Long-term liabilities: Notes payable Stockholders' equity: Common stock Retained earnings Total liabilities and stockholders' equity 183,000 209,000 226,000 (125,000) $ 895,000 100,000 258,000 208,000 (104,000) $ 815,800 $ $ 29,000 3,800 27,200 86,000 2,800 30,000 255,000 237,000 328,000 252,000 $ 895,000 280,000 180,000 $ 815,800 Additional Information for 2021: 1. Purchase additional investment in stocks for $83.000. 2. Sell land costing $49,000 for $53,000, resulting in a $4.000 gain on sale of land. 3. Purchase $18,000 in equipment by issuing a $18,000 long-term note payable to the seller. No cash is exchanged in the transaction 4. Declare and pay a cash dividend of $108,000. 5. Issue common stock for $48,000. Required: Prepare the statement of cash flows for Virtual Gaming Systems using the direct 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, 2021 Cash Flows from Operating 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