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 000s)
		2018			2017
Assets
Cash	$	480			$	250
Accounts receivable		550				290
Inventory		700				400
Land		700				650
Building		800				800
Less: Accumulated depreciation		(250	)			(215)
Equipment		3,000				2,750
Less: Accumulated depreciation		(355	)			(320	)
Patent		1,000				1,150
	$	6,625			$	5,755
Liabilities
Accounts payable	$	800			$	550
Accrued expenses payable		250				220
Lease liability—land		130				0
Shareholders' Equity
Common stock		2,660				2,500
Paid-in capital—excess of par		600				560
Retained earnings		2,185				1,925
	$	6,625			$	5,755

METAGROBOLIZE INDUSTRIES Income Statement For the Year Ended December 31, 2018 ($ in 000s)
Revenues
Sales revenue	$	3,020
Gain on sale of land		80		$	3,100
Expenses
Cost of goods sold	$	1,000
Depreciation expense—building		35
Depreciation expense—equipment		440
Loss on sale of equipment		20
Amortization of patent		150
Operating expenses		600			2,245
Net income				$	855

Additional information from the accounting records:

1. Annual payments of $20,000 on the finance lease liability are paid each January 1, beginning in 2018.
2. During 2018, equipment with a cost of $450,000 (90% depreciated) was sold.
3. The statement of shareholders' equity reveals reductions of $200,000 and $395,000 for stock dividends and cash dividends, respectively.

Required:
Prepare the statement of cash flows of Metagrobolize for the year ended December 31, 2018. Present cash flows from operating activities by the direct method. (Enter your answers in thousands (i.e., 5,000 should be entered as 5). Amounts to be deducted should be indicated with a minus sign.)

Answer 1