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CH21 (13.)

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	$	390			$	190
Accounts receivable		450				240
Inventory		600				375
Land		600				560
Building		900				900
Less: Accumulated depreciation		(300	)			(285	)
Equipment		2,750				2,450
Less: Accumulated depreciation		(430	)			(400	)
Patent		1,500				1,650
	$	6,460			$	5,680
Liabilities
Accounts payable	$	700			$	550
Accrued expenses payable		200				175
Lease liabilityland		130				0
Shareholders' Equity
Common stock		3,110				3,000
Paid-in capitalexcess of par		550				485
Retained earnings		1,770				1,470
	$	6,460			$	5,680

METAGROBOLIZE INDUSTRIES Income Statement For the Year Ended December 31, 2018 ($ in 000s)
Revenues
Sales revenue	$	2,765
Gain on sale of land		55		$	2,820
Expenses
Cost of goods sold	$	900
Depreciation expensebuilding		15
Depreciation expenseequipment		300
Loss on sale of equipment		10
Amortization of patent		150
Operating expenses	$	550			1,925
Net income				$	895

Additional information from the accounting records:

1. Annual payments of $20,000 on the finance lease liability are paid each January 1, beginning in 2018.
2. During 2018, equipment with a cost of $300,000 (90% depreciated) was sold.
3. The statement of shareholders equity reveals reductions of $175,000 and $420,000 for stock dividends and cash dividends, respectively

Answer is not complete. METAGROBOLIZE INDUSTRIES Statement of Cash Flows For year ended December 31, 2018 (S in 000s) Cash flows from operating activities: 895 Net income Adjustments for noncash effects Depreciation expense-Building Depreciation expense-Equipment Loss on sale of equipment Amortization of patent 15 300 10 150 (55 Gain on sale of land Changes in operating assets and Nabilties: (210) (225 150 25 Increase in accounts receivable Increase in inventory Increase in accounts payable Increase in aocrued expenses Net cash flows from operating activities IS 1,055 Cash flows from investing activities: Sale of land Purchase of equipment Sale of equipment 145X (600 20 (435) Cash flows from financing activites: Payment of cash dividends (420 Net cash flows from financing activities (420) 200 Net increase in cash Cash balance, January 1 Cash balance, December 31 190 390 Noncash investing and financing activities

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