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 $210,000 and $385,000 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.)

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

Equipement account Opening balance        2,870 Bank                510 Purchase of equipement        1,219 closing Balance             3,100 loss on sale                  20 Accumulated depreciation on sale of equipement                459        4,089             4,089 Accumulated depreciation on equipement Depreciation on sale of equipement            459 Opening balance                360 closing balance            397 Depreciation                496            856                856 Land account Opening balance            735 Bank                  75 gain on sale              90 closing Balance                750            825                825 Cash Flow statement Income from operating activity Net income           763 Depreciation on building             15 Depreciation on equipement           496 Increase in retained earning           168 Amortisation of patent           250 Increase in account recievable          (280) Increase in inventory          (330) Increase in account payable           200 Increase in accrued expenses             40 loss on sale of equipement             20 Gain on sale of land            (90) Net Income from opderating activity        1,252 Income from investment activity Sale of equipement           510 Purchase of equipement      (1,219) Sale of land             75 Net Income from investment activity          (634) Income from Financing activity Purchase of common stock          (200) Increase in lease liability           150 Issue of shares             10 Cash Dividend          (385) stock dividend          (210) Net Income from financing activity          (635) Net Income           215 Opening cash 305 Closing cash 520

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