Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

(Scedule of Net Cash Flow from Operating Activities - Indirect Method) Ballard Co. reported $145,000 of net income for 2008. The accountant, in preparing the

(Scedule of Net Cash Flow from Operating Activities - Indirect Method) Ballard Co. reported $145,000 of net income for 2008. The accountant, in preparing the statement of cash flows, noted several items occuring during 2008 that might affact cash flows from operating activities.

1. Ballard purchansed 100 shares of treasury stock at a cost of $20 per share. The company resold these shares at $25 per share.

2. Ballard sold 100 shares of IBM common at $200 per share. The aquisition cost of these shares was $145 per share. This investment was shown on Ballard's December 31, 20007, balance sheet as an available-for-sale security.

3. Ballard revised its estimate for ad debts. Before 2008, Ballard's bad debt expense was 1% of its net sales. In 2008, this percentage was increased 2% . Net sales for 2008 were 500,000 and net accounts receivable decreased by $12,000 during 2008.

4. Ballard issued 500 shares of its $10 par common stock for patent. The market valyue of the shares on the date of the transaction was $23 per share.

5. Depreciation expense is $39,000.

6. Ballard Co. holds 40% of the Nirvana Company's common stock as a long-term investment. Nirvana Company reported $27,000 of net income for 2008.

7. Nirvana Company paid a total of $2,000 of cash dividenr=ds to all investees in 2008.

8. Balllard declared a 10% stock dividend. One thousand shares of $10 par common stck were distributed. The market price at date of issuance was $20 per share.

Prepare a shcedule that shows the net cash flow from operating activities usuing the indirect methos. Assume no items other than those listed above affected the computation of 2008 net cash flow from operating activities.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Acct 1100 Financial Accounting 1 25 Edition

Authors: Carl S. Warren ,James M. Reeve ,Jonathan E. Duchac

1st Edition

1285558839, 978-1285558837

More Books

Students also viewed these Accounting questions

Question

Jones needed to do something to revitalize the association.

Answered: 1 week ago