Problem 21-5 Statement of cash flows; direct method [LO21-3, 21-8]

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.

Additional information from the accounting records:

A. Annual payments of $20,000 on the finance lease liability are paid each January 1, beginning in 2018.

B. During 2018, equipment with a cost of $240,000 (90% depreciated) was sold.

C. The statement of shareholders' equity reveals reductions of $165,000 and $430,000 for stock dividends and cash dividends, respectively.

Required: Prepare the statement of cash flows of Metagrobolize for the year ended December 31, 2018. Present cash flows from operating activities by the direct method. (Enter your answers in thousands (i.e., 5,000 should be entered as 5). Amounts to be deducted should be indicated with a minus sign.)

December 31, 2018 and 2017 (s in e00s) 2018 2017 Assets Cash Accounts receivable Inventory Land Building $ 410 150 220 365 530 900 (200) (165) 2,330 410 560 575 900 Less: Accumulated depreciation Equipment 2,650 Less: Accumulated depreciation (388) (360) Patent 1,600 $ 6,2175,570 1.300 00- Liabilities Accounts payable Accrued expenses payable Lease liability-land Shareholders' Equity Common stock Paid-in capital-excess of par Retained earnings $ 660$360 130 180 130 3,160 500 3,000 495 1,585 1.587- $ 6,217 5,570 METAGROBOLIZE INDUSTRIES Income Statement For the Year Ended December 31, 2018 ($ in 000s) Revenues Sales revenue $2,551 Gain on sale of land 45 $2,596 Expenses $ 860 35 244 Cost of goods sold Depreciation expense-building Depreciation expense-equipment Loss on sale of equipment Amortization of patent Operating expenses 300 550 1,999 $ 597 Net income