Problem 21-5 Statement of cash flows; direct method [LO21-3, 21-8] Comparative balance sheets for 2018 and 2017

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Question:

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.

METAGROBOLIZE INDUSTRIES Comparative Balance Sheets December 31, 2018 and 2017 ($ in 000s)
		2018		2017
Assets
Cash	$	560		$	370
Accounts receivable		710			370
Inventory		860			440
Land		700			670
Building		900			900
Less: Accumulated depreciation		(200	)		(160)
Equipment		3,400			3,230
Less: Accumulated depreciation		(343	)		(300	)
Patent		1,800			2,100
	$	8,387		$	7,620
Liabilities
Accounts payable	$	960		$	710
Accrued expenses payable		330			260
Lease liability—land		130			0
Shareholders' Equity
Common stock		3,680			3,500
Paid-in capital—excess of par		800			740
Retained earnings		2,487			2,410
	$	8,387		$	7,620

METAGROBOLIZE INDUSTRIES Income Statement For the Year Ended December 31, 2018 ($ in 000s)
Revenues
Sales revenue	$	3,131
Gain on sale of land		80	$	3,211
Expenses
Cost of goods sold	$	1,160
Depreciation expense—building		40
Depreciation expense—equipment		664
Loss on sale of equipment		25
Amortization of patent		300
Operating expenses		350		2,539
Net income			$	672

Additional information from the accounting records:

Annual payments of $20,000 on the finance lease liability are paid each January 1, beginning in 2018.
During 2018, equipment with a cost of $690,000 (90% depreciated) was sold.
The statement of shareholders' equity reveals reductions of $240,000 and $355,000 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.)