To prepare the statement of cash flows, accountants for Spencer Electric Company have summarized 2010 activity in two accounts as follows:

Spencer€™s 2010 income statement and balance sheet data follow:

Spencer Electric Company
Selected Balance Sheet Data
December 31, 2010

Increase
(Decrease)
Current assets:
Cash and cash equivalents................ $(29,700)
Accounts receivable.......................... (14,400)
Inventories........................................ (12,900)
Prepaid expenses............................... (6,000)
Long-term investments...................... (36,700)
Equipment, net................................... 15,300
Land................................................... 61,700
Current liabilities:
Accounts payable.............................. (7,800)
Interest payable................................ (2,200)
Salary payable.................................. 7,200
Other accrued liabilities.................... (10,400)
Income tax payable........................... (2,500)
Long-term note payable...................... (58,300)
Common stock.................................... 100,900
Retained earnings................................ (23,300)
Treasury stock..................................... (26,300)

Requirements
1. Prepare the statement of cash flows of Spencer Electric Company for the year ended December 31, 2010, using the direct method to report operating activities. Also prepare the accompanying schedule of noncash investing and financing activities.
2. Use Spencer€™s 2010 income statement and balance sheet to prepare a supplementary schedule of cash flows from operating activities by using the indirectmethod.

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Cash Beginning balance Sale of long-term investment Collections from customers Issuance of common stock Receipts of dividends 71,500 Payments on accounts payable 399.500 27,600 661,600 Payments of salaries and wages 143,300 27,100 31,700 Payments of operating expenses 34,900 Payment of long-term note payable 41,300 26,300 20,000 Payments of dividends 22,200 Payments of interest 16,800 Purchase of equipment Purchase of treasury stock of income tax 18 Ending Balance 41,800 Common Stock Beginning balance Issuance for cash Issuance to acquire land Issuance to retire note pavable Ending balance 73,200 61,700 17 174,100 Spencer Electric Company Income Statement Year Ended December 31, 2010 Revenues: Sales revenue Dividend revenue $647,200 16,800 664,000 Total revenue Expenses and losses: Cost of goods sold Salary and wage expense Depreciation expense Other operating expense. Interest expense income tax expense. Loss on sale of investments....16,700 $404,600 150,500 16,400 30,500 24,900 16,100 Total expenses and losses 659,700 S 4,300