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 $225,000 and $450,000 for stock dividends and cash dividends, respectively.

Prepare the statement of cash flows of Metagrobolize for the year ended December 31, 2016. Present cash flows from operating activities by the direct 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.)

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.

Explanation / Answer

Prepare the statement of cash flows of Metagrobolize for the year ended December 31, 2016. Present cash flows from operating activities by the direct method.

Cash flow from operating activity Cash received from customer 2495 Cash paid to supplier (675) Cash paid for expenses (425) Net cash flow from operating activity 1395 Cash flow from investing activity Sale of land 165 Sale of equipment 15 Purchase of equipment (900) Net cash flow from investing activity (720) Cash flow from financing activity Dividend paid (450) Net cash flow from financing activity (450) Net cash flow 225 Beginning cash 375 Ending cash 600

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