| Messner co. reported $147,590 of net income for 2010. The accountant, in preparing the statement of cash flows, noted serveral |
that might affect cash flows from operating activities. These items are
listed below. 1. Messner purchased 150 shares of treasury stock at a cost of $21 per share. These shares were then resold at $27 per share. 2. Messner sold 130 shares of
IBM common at $210 per share. The acquisition cost of these shares was $170
per share. This investment was shown on Messner's
December 31, 2009, balance sheet as an available for sales security. 3. Messner revised its
estimate for bad debts. Before 2010, Messner's bad debt expense was 1% of its
net sales. In 2010, this percentage was increased to 2%. Net sales for
2010 were $495,900, and net accounts receivable decreased by $11,490 during
2010. 4. Messner issued
520 shares of its $14 par common stock for a patent. The market value of the
shares on the date of the transacton was $26 per share. 5. Depreciation expense is
$38,980. 6. Messner Co. holds 33% of
the Sanchez Company's common stock as a long-term investment. Sanchez Company
reported $25,050 of net income for 2010. 7. Sanchez Company paid a
total of $1,900 of cash dividends to all investees in 2010. 8. Messner declared a 10%
stock dividend. One thousand shares of $14 par common stock were distributed.
The market price at date of issuance was $19 per share. Instructions Complete a schedule that shows
the net cash flow from operating activities using the indirect method. Assume
no items other than thos listed above affected the
computation of 2010 net cash flow from operating activites.
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