Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Problem 21-17 (Algo) Statement of cash flows; Indirect method [LO21-4, 21-8] Comparative balance sheets for 2021 and 2020 and a statement of income for 2021

image text in transcribedimage text in transcribed

Problem 21-17 (Algo) Statement of cash flows; Indirect method [LO21-4, 21-8] Comparative balance sheets for 2021 and 2020 and a statement of income for 2021 are given below for Metagrobolize Industries. Additional information from the accounting records of Metagrobolize also is provided. METAGROBOLIZE INDUSTRIES Comparative Balance Sheets December 31, 2021 and 2020 ($ in thousands) 2021 2020 Assets Cash $ 405 $ 245 Accounts receivable 350 190 Inventory 500 275 Land 50e 450 Building 900 900 Less: Accumulated depreciation (208) (180) Equipment 2,500 2,150 Less: Accumulated depreciation (325) (380) Patent 1,800 1,150 $ 5,630 $ 4,880 Liabilities Accounts payable $ 600 $ Accrued liabilities 15e 130 Lease liability-land 138 Shareholders' Equity Common stock 3,10 3,eee Paid-in capital-excess of par 750 700 Retained earnings 998 650 $ 5,630 $ 4,880 40e $ 2,585 METAGROBOLIZE INDUSTRIES Income Statement For the Year Ended December 31, 2021 ($ in thousands) Revenues Sales revenue $ 2,555 Gain on sale of land 30 Expenses Cost of goods sold Depreciation expense-building 2e Depreciation expense-equipment 16e Loss on sale of equipment 10 Amortization of patent 150 Operating expenses 608 Net income 800 1,740 845 $ Additional information from the accounting records: a. Annual payments of $20,000 on the finance lease liability are paid each January 1, beginning in 2021. b. During 2021, equipment with a cost of $150.000 (90% depreciated) was sold. c. The statement of shareholders' equity reveals reductions of $150.000 and $445.000 for stock dividends and cash dividends, respectively. Required: Prepare the statement of cash flows for Metagrobolize Industries using the indirect method (Enter your answers in thousands (I.e., 10,000 should be entered as 10).) Amounts to be deducted should be Indicated with a minus sign.) METAGROBOLIZE INDUSTRIES Statement of Cash Flows For year ended December 31, 2021 ($ in 000s) Cash flows from operating activities: Net income Adjustments for noncash effects: Gain on sale of land Depreciation expense - Building Depreciation expense - Equipment Loss on sale of equipment Amortization expense Changes in operating assets and liabilities: Increase in accounts receivable Increase in inventory Increase in accounts payable Increase in accrued expenses S 0 Net cash flows from operating activities Cash flows from investing activities: Purchase of equipment Sale of land Sale of equipment 0 Net cash flows from investing activities Cash flows from financing activities: Payment on lease liability Payment of dividends 0 Net cash flows from financing activities Net increase in cash Cash balance, January 1 Cash balance, December 31 Noncash investing and financing activities: Acquired land by lease S 0

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Creative And Innovative Auditing

Authors: Jeffrey Ridley

1st Edition

1472474627, 9781472474629

More Books

Students also viewed these Accounting questions

Question

What is meant by the elastic limit for a particular object?

Answered: 1 week ago