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	$	570			$	400
Accounts receivable		730				380
Inventory		880				445
Land		750				685
Building		900				900
Less: Accumulated depreciation		(250	)			(235	)
Equipment		3,450				3,290
Less: Accumulated depreciation		(364	)			(320	)
Patent		1,900				2,000
	$	8,566			$	7,545
Liabilities
Accounts payable	$	980			$	680
Accrued liabilities		340				265
Lease liability—land		130				0
Shareholders' Equity
Common stock		3,700				3,500
Paid-in capital—excess of par		800				755
Retained earnings		2,616				2,345
	$	8,566			$	7,545

METAGROBOLIZE INDUSTRIES Income Statement For the Year Ended December 31, 2021 ($ in thousands)
Revenues
Sales revenue	$	3,143
Gain on sale of land		85		$	3,228
Expenses
Cost of goods sold		1,180
Depreciation expense—building		15
Depreciation expense—equipment		692
Loss on sale of equipment		25
Amortization of patent		100
Operating expenses		350			2,362
Net income				$	866

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 $720,000 (90% depreciated) was sold.
3. The statement of shareholders’ equity reveals reductions of $245,000 and $350,000 for stock dividends and cash dividends, respectively.

Required:
Prepare the statement of cash flows for Metagrobolize Industries using the indirect method.

Answer 1