Question

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	$	520			$	225
Accounts receivable		630				330
Inventory		780				420
Land		550				540
Building		700				700
Less: Accumulated depreciation		(300	)			(280	)
Equipment		3,200				2,990
Less: Accumulated depreciation		(439	)			(400	)
Patent		1,400				1,500
	$	7,041			$	6,025
Liabilities
Accounts payable	$	880			$	630
Accrued expenses payable		290				240
Lease liability—land		130				0
Shareholders' Equity
Common stock		3,600				3,500
Paid-in capital—excess of par		550				430
Retained earnings		1,591				1,225
	$	7,041			$	6,025

METAGROBOLIZE INDUSTRIES
Income Statement
For the Year Ended December 31, 2018 ($ in 000s)

Revenues

Sales revenue$3,078   

Gain on sale of land 60 $3,138

Expenses    

  Cost of goods sold$1,080    

Depreciation expense—building 20    

Depreciation expense—equipment 552    

Loss on sale of equipment 25   

Amortization of patent 100  

Operating expenses$400  2,177

Net income   $961

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 $570,000 (90% depreciated) was sold.
3. The statement of shareholders’ equity reveals reductions of $220,000 and $375,000 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.)

Answer 1

Cash received from sale of land

= 540 - 550 + 60 + 150

= 200