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 $2,580,000 Gain on sale of land 6,000 Total revenues 2,586,000 Expenses: Cost of goods sold $1,640,000 Operating expenses 613,000 Depreciation expense 31,000 Interest expense 32,000 Income tax expense 78,000 2,394,000 Total expenses $ 192,000 Net income VIRTUAL GAMING SYSTEMS Balance Sheets December 31 2021 2020 $ 355,520 66,200 157,000 4,480 $ 291,840 82,000 143,000 6,960 213,000 214,000 246,000 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' eauitv: 120,000 268,000 218,000 (109,000) $1,020,800 (140,000) $1,116,200 $ $ 34,000 5,000 24,200 96,000 3,800 28,000 261,000 233,000 ALLUULIL ise 157,000 4,480 UL, Uue 143,000 6,960 213,000 214,000 246,000 (140,000) $1,116,200 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 120,000 268,000 218,000 (109,000) $1,020,800 $ $ 34,000 5,000 24, 200 96,000 3,800 28,800 261,000 233,000 438,000 354,000 $1,116,200 380,000 280,000 $1,020,800 Additional Information for 2021: 1. Purchase additional investment in stocks for $93.000. 2. Sell land costing $54,000 for $60,000, resulting in a $6,000 gain on sale of land 3. Purchase $28,000 in equipment by issuing a $28,000 long-term note payable to the seller. No cash is exchanged in the transaction 4. Declare and pay a cash dividend of $118,000 5. Issue common stock for $58,000 PS 192,000 VIRTUAL GAMING SYSTEMS Statement of Cash Flows For the Year Ended December 31, 2021 Cash Flows from Operating Activities Net income Adjustments to reconcile net income to net cash flows from operating activities: Depreciation expense Gain (on sale of land) Decrease in accounts receivable Increase in inventory Decrease in prepaid rent Decrease in accounts payable Increase in interest payable Decrease in income tax payable 31.000 223,000 Net cash flows from operating activities Cash Flows from Investing Activities Purchase investment in stock Proceeds from sale of land UTES payu 223,000 Net cash flows from operating activities Cash Flows from Investing Activities Purchase investment in stock Proceeds from sale of land Net cash flows from investing activities Cash Flows from Financing Activities Issue common stock Payment of cash dividends Net cash flows from financing activities Cash at the beginning of the period Cash at the end of the period Note: Noncash Activities Purchase equipment issuing a note payable