Problem 21-5 Statement of cash flows; direct method [LO21-3, 21-8]

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	$	530			$	255
Accounts receivable		650				340
Inventory		800				425
Land		600				555
Building		900				900
Less: Accumulated depreciation		(200	)			(175)
Equipment		3,250				3,050
Less: Accumulated depreciation		(460	)			(420	)
Patent		1,500				1,650
	$	7,570			$	6,580
Liabilities
Accounts payable	$	900			$	600
Accrued expenses payable		300				245
Lease liabilityland		130				0
Shareholders' Equity
Common stock		3,620				3,500
Paid-in capitalexcess of par		550				445
Retained earnings		2,070				1,790
	$	7,570			$	6,580

METAGROBOLIZE INDUSTRIES Income Statement For the Year Ended December 31, 2018 ($ in 000s)
Revenues
Sales revenue	$	3,040
Gain on sale of land		65		$	3,105
Expenses
Cost of goods sold	$	1,100
Depreciation expensebuilding		25
Depreciation expenseequipment		580
Loss on sale of equipment		25
Amortization of patent		150
Operating expenses		350			2,230
Net income				$	875

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 $600,000 (90% depreciated) was sold.
3. The statement of shareholders' equity reveals reductions of $225,000 and $370,000 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.)