Comparative balance sheets for 2018 and 2017 and a statement of income for 2018

Question

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 thousands) 2018 2017 Assets Cash Accounts receivable Inventory s 580 450 525 675 Building Less: Accumulated depreciation (300) 2,850 (525) 1.200 $6,880 Equipment 2,250 (480) 1,500 $5,850 Less: Accumulated depreciation Patent Liabilities Accounts payable Accrued expenses payable Lease liability-land Shareholders' Equity Common stock Paid-in capital-excess of par Retained earnings s 750 s 450 130 3,150 3,000 675 1,500 $5,850 1,800 $6,880 METAGROBOLIZE INDUSTRIES Income Statement For the Year Ended December 31, 2018 ($ in thousands) Revenues Sales revenue Gain on sale of land $2,645 $2,735 Expenses Cost of goods sold Depreciation expense-equipment Loss on sale of equipment Amortization of patent Operating expenses 315 15 1,760 Net income s 975

Explanation / Answer

Cash flow statement using Indirect Method Cash flows from operating activities Net income $        975.00 Gain on sale of land $        (90.00) Depreciation and amortization $        645.00 Loss on sale of equipment $          15.00 Increase in Trade Receivable $     (150.00) Increase in Inventory $     (375.00) Inecrease in trade payables $        300.00 Increase in accrued libility $          75.00 Net Cash used in operatingactivity $ 1,395.00 Sale of Land [75+90] $        165.00 Sale of Equipment $          15.00 Purchase of Equipment $     (900.00) Net cash used in investing activities $     (720.00) Issue of Common Stock $          75.00 Payment of Finance lease liability $        (20.00) Cash Dividend paid $     (450.00) Net cash used in financing activities $ (395.00) $    280.00 $        375.00 $        655.00 Note Calculation of cash received on sale of equipment Book Value of Equipment (300000*(1-.90)) $          30.00 Less: Loss on sale of Equipment $          15.00 Cash received on sale of equipment $          15.00 Equipment Purchased during the year Closing Value of Equipment $    2,850.00 Equipment Sold during the year $        300.00 Less: Opening Value of Equipment $    2,250.00 Equipment Purchased during the year $        900.00 Shares issued during theyear Opening Share Capital $    3,000.00 Add: Stock Dividend $        225.00 Less: Closing Share Capital $    3,150.00 Shares issued during theyear $          75.00

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