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

   

VIDEO PHONES, INC.
Income Statement
For the Year Ended December 31, 2021
Net sales				$	3,536,000
Expenses:
Cost of goods sold	$	2,350,000
Operating expenses		938,000
Depreciation expense		35,000
Loss on sale of land		8,800
Interest expense		19,000
Income tax expense		56,000
Total expenses					3,406,800
Net income				$	129,200

VIDEO PHONES, INC.
Balance Sheets
December 31
	2021				2020
Assets
Current assets:
Cash	$	260,880			$	211,040
Accounts receivable		89,800				68,000
Inventory		105,000				143,000
Prepaid rent		13,920				6,960
Long-term assets:
Investments		113,000				0
Land		218,000				256,000
Equipment		286,000				218,000
Accumulated depreciation		(78,600	)			(43,600	)
Total assets	$	1,008,000			$	859,400
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	73,200			$	89,000
Interest payable		6,800				11,600
Income tax payable		15,800				14,800
Long-term liabilities:
Notes payable		301,000				233,000
Stockholders' equity:
Common stock		380,000				380,000
Retained earnings		231,200				131,000
Total liabilities and stockholders’ equity	$	1,008,000			$	859,400

Additional Information for 2021:

1. Purchase investment in bonds for $113,000.
2. Sell land costing $38,000 for only $29,200, resulting in a $8,800 loss on sale of land.
3. Purchase $68,000 in equipment by issuing a $68,000 long-term note payable to the seller. No cash is exchanged in the transaction.
4. Declare and pay a cash dividend of $29,000.

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.)