Comparative balance sheets for 2013 and 2012 and a statement of income for 2013 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 2013, equipment with a cost of $300,000 (90% depreciated) was sold. Any equipment purchased used cash.

b. The statement of shareholders' equity reveals reductions of $225,000 and $450,000 for stock dividends and cash dividends, respectively.

REQUIRED:

1. Prepare the statement of cash flows of Metagrobolize for the year ended December 31, 2013. 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).

2. Prepare the statement of cash flows using the indirect method.

METAGROBOLIZE INDUSTRIES Comparative Balance Sheets December 31, 2013 and 2012 ($ in 000s) 2013 2012 Assets Cash Accounts receivable Inventory Land Building Less: Accumulated depreciation Equipment Less: Accumulated depreciation Patent $ 600 600 900 675 900 (300) 2,850 (525) 1,200 $6,900 $ 375 450 525 600 900 (270) 2,250 (480) 1,500 $5,850 $ 750 300 150 $ 450 225 Liabilities Accounts payable Accrued expenses payable Lease liability and Shareholders' Equity Common stock Paid-in capital-excess of par Retained earnings 3,150 750 1,800 3,000 675 1,500 $5,850 $6,900 $2,735 METAGROBOUZE INDUSTRIES Income Statement For the Year Ended December 31, 2013 ($ in 000s) Revenues Sales revenue $2,645 Gain on sale of land 90 Expenses Cost of goods sold $ 600 Depreciation expense--building 30 Depreciation expense-equipment 315 Loss on sale of equipment 15 Amortization of patent 300 Operating expenses 500 Net income 1,760 $ 975