Exercise 23-8

Ballard Co. reported $141,050 of net income for 2014. The accountant, in preparing the statement of cash flows, noted the following items occurring during 2014 that might affect cash flows from operating activities.

1.		Ballard purchased 130 shares of treasury stock at a cost of $21 per share. These shares were then resold at $26 per share.
2.		Ballard sold 100 shares of IBM common at $200 per share. The acquisition cost of these shares was $160 per share. This investment was shown on Ballards December 31, 2013, balance sheet as an available-for-sale security.
3.		Ballard revised its estimate for bad debts. Before 2014, Ballards bad debt expense was 1% of its net sales. In 2014, this percentage was increased to 2%. Net sales for 2014 were $492,600, and net accounts receivable decreased by $14,430 during 2014.
4.		Ballard issued 510 shares of its $13 par common stock for a patent. The market price of the shares on the date of the transaction was $25 per share.
5.		Depreciation expense is $45,690.
6.		Ballard Co. holds 35% of the Nirvana Companys common stock as a long-term investment. Nirvana Company reported $27,700 of net income for 2014.
7.		Nirvana Company paid a total of $2,100 of cash dividends to all investees in 2014.
8.		Ballard declared a 10% stock dividend. One thousand shares of $13 par common stock were distributed. The market price at date of issuance was $19 per share.

Prepare a schedule that shows the net cash flow from operating activities using the indirect method. Assume no items other than those listed above affected the computation of 2014 net cash flow from operating activities. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

Ballard Co. Statement of Cash Flows (Partial) For the Year 2014 Adjustments to reconcile net income to