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	$	530			$	255
Accounts receivable		650				340
Inventory		800				425
Land		600				555
Building		900				900
Less: Accumulated depreciation		(200	)			(175)
Equipment		3,250				3,050
Less: Accumulated depreciation		(460	)			(420	)
Patent		1,500				1,650
	$	7,570			$	6,580
Liabilities
Accounts payable	$	900			$	600
Accrued liabilities		300				245
Lease liability—land		130				0
Shareholders' Equity
Common stock		3,620				3,500
Paid-in capital—excess of par		550				445
Retained earnings		2,070				1,790
	$	7,570			$	6,580

METAGROBOLIZE INDUSTRIES Income Statement For the Year Ended December 31, 2021 ($ in thousands)
Revenues
Sales revenue	$	3,040
Gain on sale of land		65		$	3,105
Expenses
Cost of goods sold	$	1,100
Depreciation expense—building		25
Depreciation expense—equipment		580
Loss on sale of equipment		25
Amortization of patent		150
Operating expenses		350			2,230
Net income				$	875

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 $600,000 (90% depreciated) was sold.
3. The statement of shareholders' equity reveals reductions of $225,000 and $370,000 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