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	$	400			$	170
Accounts receivable		430				230
Inventory		580				370
Land		550				545
Building		900				900
Less: Accumulated depreciation		(250	)			(210)
Equipment		2,700				2,390
Less: Accumulated depreciation		(409	)			(380	)
Patent		1,400				1,500
	$	6,301			$	5,515
Liabilities
Accounts payable	$	680			$	480
Accrued liabilities		190				115
Lease liability—land		130				0
Shareholders' Equity
Common stock		3,160				3,000
Paid-in capital—excess of par		500				490
Retained earnings		1,641				1,430
	$	6,301			$	5,515

METAGROBOLIZE INDUSTRIES Income Statement For the Year Ended December 31, 2021 ($ in thousands)
Revenues
Sales revenue	$	2,608
Gain on sale of land		50		$	2,658
Expenses
Cost of goods sold	$	880
Depreciation expense—building		40
Depreciation expense—equipment		272
Loss on sale of equipment		10
Amortization of patent		100
Operating expenses		550			1,852
Net income				$	806

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 $270,000 (90% depreciated) was sold.
3. The statement of shareholders' equity reveals reductions of $170,000 and $425,000 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 is given below