In: 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 |
||||||||
2018 |
2017 |
|||||||
Assets |
||||||||
Cash |
$ |
440 |
$ |
190 |
||||
Accounts receivable |
470 |
250 |
||||||
Inventory |
620 |
380 |
||||||
Land |
625 |
575 |
||||||
Building |
800 |
800 |
||||||
Less: Accumulated depreciation |
(200 |
) |
(170) |
|||||
Equipment |
2,800 |
2,510 |
||||||
Less: Accumulated depreciation |
(451 |
) |
(420 |
) |
||||
Patent |
1,600 |
1,800 |
||||||
$ |
6,704 |
$ |
5,915 |
|||||
Liabilities |
||||||||
Accounts payable |
$ |
720 |
$ |
470 |
||||
Accrued expenses payable |
210 |
165 |
||||||
Lease liability—land |
130 |
0 |
||||||
Shareholders' Equity |
||||||||
Common stock |
2,650 |
2,500 |
||||||
Paid-in capital—excess of par |
500 |
470 |
||||||
Retained earnings |
2,494 |
2,310 |
||||||
$ |
6,704 |
$ |
5,915 |
|||||
METAGROBOLIZE INDUSTRIES |
||||||
Revenues |
||||||
Sales revenue |
$ |
2,807 |
||||
Gain on sale of land |
60 |
$ |
2,867 |
|||
Expenses |
||||||
Cost of goods sold |
$ |
920 |
||||
Depreciation expense—building |
30 |
|||||
Depreciation expense—equipment |
328 |
|||||
Loss on sale of equipment |
10 |
|||||
Amortization of patent |
200 |
|||||
Operating expenses |
600 |
2,088 |
||||
Net income |
$ |
779 |
||||
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 $330,000 (90% depreciated) was sold.
The statement of shareholders' equity reveals reductions of $180,000 and $415,000 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.