Reference no: EM132969438

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 $500 $305

Accounts receivable 590 310

Inventory 740 410

Land 750 735

Building 700 700

Less: Accumulated depreciation (200) (185)

Equipment 3,100 2,870

Less: Accumulated depreciation (397) (360)

Patent 1,200 1,450

$6,983 $6,235

Liabilities

Accounts payable $840 $640

Accrued liabilities 270 230

Lease liability-land 130 0

Shareholders' Equity

Common stock 3,700 3,500

Paid-in capital-excess of par 550 540

Retained earnings 1,493 1,325

$6,983 $6,235

METAGROBOLIZE INDUSTRIES Income Statement For the Year Ended December 31, 2021 ($ in thousands)

Revenues

Sales revenue $2,894

Gain on sale of land 90 $2,984

Expenses

Cost of goods sold $1,040

Depreciation expense-building 15

Depreciation expense-equipment 496

Loss on sale of equipment 20

Amortization of patent 250

Operating expenses 400 2,221

Net income $763

Additional information from the accounting records:

-Annual payments of $20,000 on the finance lease liability are paid each January 1, beginning in 2021.

-During 2021, equipment with a cost of $510,000 (90% depreciated) was sold.

-The statement of shareholders' equity reveals reductions of $210,000 and $385,000 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.