90.2K

Verified Solution

Link Copied!

Comparative balance sheets for 2018 and 2017 and a statement of income for 2018 are given below for Metagrobolize Industries. Additional information from the accounting records of Metagrobolize also is provided.

METAGROBOLIZE INDUSTRIES Comparative Balance Sheets December 31, 2018 and 2017 ($ in 000s)
		2018			2017
Assets
Cash	$	440			$	190
Accounts receivable		470				250
Inventory		620				380
Land		625				575
Building		800				800
Less: Accumulated depreciation		(200	)			(170)
Equipment		2,800				2,510
Less: Accumulated depreciation		(451	)			(420	)
Patent		1,600				1,800
	$	6,704			$	5,915
Liabilities
Accounts payable	$	720			$	470
Accrued expenses payable		210				165
Lease liabilityland		130				0
Shareholders' Equity
Common stock		2,650				2,500
Paid-in capitalexcess of par		500				470
Retained earnings		2,494				2,310
	$	6,704			$	5,915

METAGROBOLIZE INDUSTRIES Income Statement For the Year Ended December 31, 2018 ($ in 000s)
Revenues
Sales revenue	$	2,807
Gain on sale of land		60		$	2,867
Expenses
Cost of goods sold	$	920
Depreciation expensebuilding		30
Depreciation expenseequipment		328
Loss on sale of equipment		10
Amortization of patent		200
Operating expenses		600			2,088
Net income				$	779

Additional information from the accounting records:

Annual payments of $20,000 on the finance lease liability are paid each January 1, beginning in 2018.

During 2018, equipment with a cost of $330,000 (90% depreciated) was sold.

The statement of shareholders' equity reveals reductions of $180,000 and $415,000 for stock dividends and cash dividends, respectively.

Required: Prepare the statement of cash flows of Metagrobolize for the year ended December 31, 2018. Present cash flows from operating activities by the direct method.

Answer & Explanation Solved by verified expert

See Answer