Comparative balance sheets for 2016 and 2015 and a statement of income for 2016

Question

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.

The statement of shareholders’ equity reveals reductions of $245,000 and $350,000 for stock dividends and cash dividends, respectively.

Prepare the statement of cash flows for Metagrobolize Industries using the indirect method. (Enter your answers in thousands. (i.e., 10,000 should be entered as 10).) Amounts to be deducted should be indicated with a minus sign.)

METAGROBOLIZE INDUSTRIES
Comparative Balance Sheets
December 31, 2016 and 2015
($ in 000s) 2016 2015 Assets   Cash $ 590 $ 400   Accounts receivable 730 380     Inventory 880 445     Land 750 685     Building 900 900      Less: Accumulated depreciation (250) (235)   Equipment 3,450 3,290      Less: Accumulated depreciation (364) (320)   Patent 1,900 2,000 $ 8,586 $ 7,545     Liabilities   Accounts payable $ 980 $ 680   Accrued expenses payable 340 265   Lease liability—land 150 0   Shareholders' Equity   Common stock 3,700 3,500     Paid-in capital—excess of par 800 755     Retained earnings 2,616 2,345   $ 8,586 $ 7,545

Explanation / Answer

Statement of Cash Flow Particulars Amount Total Amount Income                    866.00 Gain on sale of Land                    (85.00) Loss on Sale of Equipment                      25.00 Depreciation- Building                      15.00 Depreciation- Equipment                    692.00 Amortisation of Patent                    100.00 Increase in AR                 (350.00) Increase in inventory                 (435.00) Increase in AP                    300.00 Increase in Accrued Expenses Payable                      75.00 Cash flow from operating activities                1,203.00 Cash flow from Investing activities Purchase of Land                    (65.00) Sale of Land                      85.00 Purchase of Equipment = 3450 - (3290 -720 )                 (880.00) Sale of Equipment = 720*.10 - 25                      47.00 Cash flow from Investing activities                 (813.00) Cash flow from Financing activities Issue of Stock                             -   Issue of additional Paid in capital                             -   Raising of lease                    150.00 Dividends Paid                 (350.00) Cash flow from Financing activities                 (200.00) Opening cash and cash equivalents                    400.00 Closing cash and cash equivalents                    590.00

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