60.1K

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	$	550			$	340
Accounts receivable		690				360
Inventory		840				435
Land		650				600
Building		900				900
Less: Accumulated depreciation		(300	)			(265)
Equipment		3,350				3,170
Less: Accumulated depreciation		(502	)			(460	)
Patent		1,700				1,950
	$	7,878			$	7,030
Liabilities
Accounts payable	$	940			$	790
Accrued expenses payable		320				255
Lease liabilityland		130				0
Shareholders' Equity
Common stock		3,660				3,500
Paid-in capitalexcess of par		800				725
Retained earnings		2,028				1,760
	$	7,878			$	7,030

METAGROBOLIZE INDUSTRIES Income Statement For the Year Ended December 31, 2018 ($ in 000s)
Revenues
Sales revenue	$	3,224
Gain on sale of land		75		$	3,299
Expenses
Cost of goods sold	$	1,140
Depreciation expensebuilding		35
Depreciation expenseequipment		636
Loss on sale of equipment		25
Amortization of patent		250
Operating expenses		350			2,436
Net income				$	863

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 $660,000 (90% depreciated) was sold.
3. The statement of shareholders' equity reveals reductions of $235,000 and $360,000 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. (Enter your answers in thousands (i.e., 5,000 should be entered as 5). Amounts to be deducted should be indicated with a minus sign.)

METAGROBOLIZE INDUSTRIES Statement of Cash Flows For year ended December 31, 2018 ($ in 000s) Cash flows from operating activities: selected answer correct Cash inflows: From customers selected answer correct $2,894 selected answer correct not attempted not attempted not attempted not attempted not attempted not attempted Cash outflows: To suppliers of goods selected answer correct not attempted For operating expenses selected answer correct not attempted not attempted not attempted Net cash flows from operating activities selected answer correct $2,894 Cash flows from investing activities: selected answer correct Purchase of equipment selected answer correct not attempted Sale of land selected answer correct not attempted Sale of equipment selected answer correct not attempted not attempted not attempted not attempted not attempted Net cash flows from investing activities selected answer correct 0 Cash flows from financing activities: selected answer correct Payment of cash dividends selected answer correct not attempted Payment on lease liability selected answer correct not attempted not attempted not attempted not attempted not attempted Net cash flows from financing activities selected answer correct 0 not attempted not attempted not attempted not attempted not attempted $0 Noncash investing and financing activities: not attempted

Answer & Explanation Solved by verified expert

See Answer