5.00 points Comparative balance sheets for 2016 and 2015 and a statement of inco
ID: 2563059 • Letter: 5
Question
5.00 points 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. METAGROBOLIDE INDUSTRIES December 31, 201 and 2015 s in 000s) $490 220 Building Equipment 790 630 2640 2500 For the Year Ended December 31, 2016 $3,123 Gain on sae off land Cost of goods sold s 980 Operaling expenses 600 2.542 Net income 1,05 Additional information from the accounting records During 2016, equipment with a cost of $420,000 (90% depreciated) was sold b The statement of shareholders' equity reveals reductions of $195,000 and $400,000 for stock dividends and cash dividends, Required: 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.)Explanation / Answer
Answer:
Metagrobolize Industries
Statement of Cash Flows
For the year ended December 31, 2016
Cash Flow from Operating Activities
Net Income
$
1056
Add:
Dep'n Exp-Bldg (200-170)
30
Dep'n Exp-Equip
412
Patent Amort. (2000-1900)
100
Loss on Equip
20
Increase A/P (780-6330)
150
Increase Exp/P (240-215)
25
737
Ded.
Increase A/R (280-530)
250
Increase in Inventory (680-395)
285
Gain on Land
75
610
127
Cash Flow from Operating Activities
1,183
Cash Flow from Investing Activities
Sale of Equipment (420*10%)-20
$
22
Sale of Land
145
Purchase equipment
-680
-513
Cash Flow from Financing Activiteis
Paid dividends
-400
Net Change in Cash
270
Add, January 1 Balance
220
Balance, December 31
490
Working notes for the answer
1
Purchase of equipment
Equipment Opeaning
2690
Less:sales
-420
Net balance
2270
Less: closing
2950
Purchase of Equipment (2950-2950)
680
2
Land purchased by leasing $ 150 will not be considered in cash flow
Metagrobolize Industries
Statement of Cash Flows
For the year ended December 31, 2016
Cash Flow from Operating Activities
Net Income
$
1056
Add:
Dep'n Exp-Bldg (200-170)
30
Dep'n Exp-Equip
412
Patent Amort. (2000-1900)
100
Loss on Equip
20
Increase A/P (780-6330)
150
Increase Exp/P (240-215)
25
737
Ded.
Increase A/R (280-530)
250
Increase in Inventory (680-395)
285
Gain on Land
75
610
127
Cash Flow from Operating Activities
1,183
Cash Flow from Investing Activities
Sale of Equipment (420*10%)-20
$
22
Sale of Land
145
Purchase equipment
-680
-513
Cash Flow from Financing Activiteis
Paid dividends
-400
Net Change in Cash
270
Add, January 1 Balance
220
Balance, December 31
490
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