Question

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	$	480			$	250
Accounts receivable		550				290
Inventory		700				400
Land		700				650
Building		800				800
Less: Accumulated depreciation		(250	)			(215)
Equipment		3,000				2,750
Less: Accumulated depreciation		(355	)			(320	)
Patent		1,000				1,150
	$	6,625			$	5,755
Liabilities
Accounts payable	$	800			$	550
Accrued liabilities		250				220
Lease liability—land		130				0
Shareholders' Equity
Common stock		2,660				2,500
Paid-in capital—excess of par		600				560
Retained earnings		2,185				1,925
	$	6,625			$	5,755

METAGROBOLIZE INDUSTRIES Income Statement For the Year Ended December 31, 2021 ($ in thousands)
Revenues
Sales revenue	$	3,020
Gain on sale of land		80		$	3,100
Expenses
Cost of goods sold	$	1,000
Depreciation expense—building		35
Depreciation expense—equipment		440
Loss on sale of equipment		20
Amortization of patent		150
Operating expenses		600			2,245
Net income				$	855

Additional information from the accounting records:

1. Annual payments of $20,000 on the finance lease liability are paid each January 1, beginning in 2021.
2. During 2021, equipment with a cost of $450,000 (90% depreciated) was sold.
3. The statement of shareholders' equity reveals reductions of $200,000 and $395,000 for stock dividends and cash dividends, respectively.

Required:
Prepare the statement of cash flows of Metagrobolize for the year ended December 31, 2021. Present cash flows from operating activities by the direct 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.)

Answer 1

Answer-

METAGROBOLIZE INDUSTRIES
STATEMENT OF CASH FLOWS (USING DIRECT METHOD)
FOR THE YEAR ENDED 31 DECEMBER,2018
Particulars		Amount
		$
Cash flow from operating activities
Cash received from customers	($3020+$290-$550)	2760
Cash paid to suppliers	($1000+$700-$400+550-$800)	-1050
Cash paid for operating expenses	($600+$220-$250)	-570
Net cash flow from operating activities (a)		1140
Cash Flow from Investing activities
New equipment purchased	($3000+$450-$2750)	-700
Old equipment sold		25
Land sold		160
Net cash Flow from Investing activities (b)		-515
Cash Flow from Financing activities
Cash dividends paid		-395
Net cash Flow from Financing activities (c)		-395
Net Change in cash c=a+b+c		230
Beginning cash balance		250
Closing cash balance		480