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

Additional Information for 2012:
1. Purchase additional investment in stocks for $85,000.
2. Sell land costing $50,000 for $52,000, resulting in a $2,000 gain on sale of land.
3. Purchase $20,000 in equipment by borrowing $20,000 with a note payable due in three years. No cash is exchanged in the transaction.
4. Declare and pay a cash dividend of $110,000.
5. Issue common stock for $50,000.
Required:
Prepare the statement of cash flows using the indirect method. Disclose any noncash transactions in an accompanying note.

VIRTUAL GAMING SYSTEMS Income Statement For the year ended December 31, 2012 Revenues Gain on sale of land $2,500,000 2000 2,502,000 Total revenues Cost of goods sold Operating expenses Depreciation expense Interest expense Income tax expense $1,600,000 605,000 23,000 24,000 70,000 2 322000 $ 180,000 Total expenses Net income VIRTUAL GAMING SYSTEMS Balance Sheet 2012 2011 Assets Current assets: Cash Accounts receivable Inventory Prepaid rent $199,000 75,000 145,000 4,000 $144,000 90,000 135,000 6,000 Long-term assets: Investments Land Equipment Accumulated depreciation 185,000 210,000 230,000 100,000 260,000 210,000 (105,000) $840,000 Total assets $920,000 Liabilities and Stockholders' Equit Current liabilities: Accounts payable Interest payable Income tax payable S 30,000 4,000 21,000 $ 88,000 3,000 24,000 Long-term liabilities: Notes payable 245,000 225,000 Stockholders' equity: Common stock Retained earnings 350,000 270,000 $920,000 300,000 200,000 $840,000 Total liabilities and stockholders' equity