Comparative balance sheets for 2016 and 2015 and a statement of income for 2016 are given below for Metagrobolize Industries. Additional information from the accounting records of Metagrobolize also is provided.

Additional information from the accounting records:

a. During 2016, equipment with a cost of $360,000 (90% depreciated) was sold.

b. The statement of shareholders’ equity reveals reductions of $185,000 and $410,000 for stock dividends and cash dividends, respectively.

Required:

Prepare the statement of cash flows of Metagrobolize for the year ended December 31, 2016. Present cash flows from operating activities by the direct method. (You may omit the schedule to reconcile net income to cash flows from operating activities.)

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Assets Cash METAGROBOLIZE INDUSTRIES Comparative Balance Sheets December 31, 2016 and 2015 ($ in 000s) Accounts receivable Inventory Land Building Less: Accumulated depreciation Equipment Less: Accumulated depreciation Patent Liabilities Accounts payable Accrued expenses payable Lease liability-land Shareholders' Equity Common stock Paid-in capital-excess of par Retained earnings 2016 $ 600 600 900 675 900 (300) 2,850 (525) 1,200 $6,900 $ 750 300 150 3,150 750 1,800 $6,900 2015 $ 375 450 525 600 900 (270) 2,250 (480) 1,500 $5,850 $ 450 225 0 3,000 675 1,500 $5,850 Assets Cash METAGROBOLIZE INDUSTRIES Comparative Balance Sheets December 31, 2016 and 2015 ($ in 000s) Accounts receivable Inventory Land Building Less: Accumulated depreciation Equipment Less: Accumulated depreciation Patent Liabilities Accounts payable Accrued expenses payable Lease liability-land Shareholders' Equity Common stock Paid-in capital-excess of par Retained earnings 2016 $ 600 600 900 675 900 (300) 2,850 (525) 1,200 $6,900 $ 750 300 150 3,150 750 1,800 $6,900 2015 $ 375 450 525 600 900 (270) 2,250 (480) 1,500 $5,850 $ 450 225 0 3,000 675 1,500 $5,850

Answer rating: 100% (QA)

METAGROBOLIZE INDUSTRIES Statement of Cash Flows For the Year Ended December 31 ... View the full answer