Question
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
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)20182017AssetsCash$580$375Accounts receivable600450Inventory900525Land675600Building900900Less: Accumulated depreciation(300)(270)Equipment2,8502,250Less: Accumulated depreciation(525)(480)Patent1,2001,500$6,880$5,850LiabilitiesAccounts payable$750$450Accrued expenses payable300225Lease liabilityland1300Shareholders' EquityCommon stock3,1503,000Paid-in capitalexcess of par750675Retained earnings1,8001,500$6,880$5,850
METAGROBOLIZE INDUSTRIES
Income Statement
For the Year Ended December 31, 2018
($ in 000s)RevenuesSales revenue$2,645Gain on sale of land90$2,735ExpensesCost of goods sold$600Depreciation expensebuilding30Depreciation expenseequipment315Loss on sale of equipment15Amortization of patent300Operating expenses$5001,760Net income$975
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 $300,000 (90% depreciated) was sold.
- 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 for Metagrobolize Industries using theindirect method.(Amounts to be deducted should be indicated with a minus sign. Enter your answers in thousands. (i.e., 10,000 should be entered as 10).)
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