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.

Additional information from the accounting records:
a. Annual payments of $20,000 on the finance lease liability are paid each January 1, beginning in 2018.
b. During 2018, equipment with a cost of $300,000 (90% depreciated) was sold.
c. The statement of shareholders' equity reveals reductions of $225,000 and $450,000 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. (You may omit the schedule to reconcile net income to cash flows from operating activities.)

Transcribed Image Text:

METAGROBOLIZE INDUSTRIES Comparative Balance Sheets December 31, 2018 and 2017 (S in thousands) 2018 2017 Assets S 580 375 450 525 Accounts receivable 675 2,850 (525) 1,200 $6,880 (270) 2,250 (480) 1,500 $5,850 Equipment Llabllitles Accounts payable Accrued expenses payable Lease liability-land Shareholders' Equlty Common stock Paid-in capita-excess of par Retained earnings $ 450 225 $ 750 130 3,150 1,800 $6,880 3,000 675 1,500 $5,850 METAGROBOLIZE INDUSTRIES Income Statement For the Year Ended December 31, 2018 (S in thousands) Sales revenue Gain on sale of land $2,645 $2,735 Cost of goods sold Depreciation expense-building Depreciation expense-equipment Loss on sale of equipment Amortization of patent Operating expenses 315 15 1,760 S 975 Net Income