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

Question

21.3

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 000s) 2018 2017 Assets Cash Accounts receivable Inventory Land Building $470220 280 395 620 800 (200) (170) 2, 690 530 680 700 800 Less: Accumulated depreciation Equipment 2,950 Less: Accumulated depreciation (334) (300) 1,900 2, 000 7,496 6,535 Patent Liabilities Accounts payable Accrued expenses payable Lease liability-land shareholders' Equity Common stock Paid-in capital-excess of par Retained earnings $ 780630 215 240 130 2,500 545 2, 645 $7,496 6,535 2,640 600 3,106

Explanation / Answer

Cash flow indirect method Cash flow from operating activities Net income 1056 Adjustments to reconcile the net income Amortization of patent 100 Depreciation expense 442 Loss on sale of equipment 20 Gain on sale of land -75 Changes in current asset and liabilities Increase in accounts receivable -250 Increase in Inventory -285 Increase in accounts payable 150 Increase in accrued expense payable 25 127 Cash flow from operating activities 1183 Cash flow from Investing activities Equipment purchased -680 Equipment sold 22 Land sold 125 Cash flow from Investing activities -533 Cash flow from Financing activities Bonds payable Common stock Dividend paid -400 Cash flow from Financing activities -400 Net Cash and cash equivalent 250 Add Beginning cash and cash equivalent 220 Ending cash and cash equivalent 470

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