Consolidated net income: to noncontrolling interest to parent company 38,000 $(262,000) Additional Information for 2020: o The subsidiary purchased a building on 10 April for $410,000 in cash. o Amortization of databases amounts to $30,000 per year. 42,000 $(338,000) o The parent issued stock for cash on 1 July. o The parent sold equipment with a cost of $160,000 but a $80,000 book value for cash on August 20. o During the year, the subsidiary paid dividends of $20,000. Both parent and subsidiary pay dividends in the same year as declared. The parent issued bonds during the year for cash. The only changes affecting retained earnings are net income and cash dividends paid. Required: Prepare a consolidated statement of cash flows for this business combination for the year ending December 31, 2020, using the indirect method.
Consolidated net income: to noncontrolling interest to parent company 38,000 $(262,000) Additional Information for 2020: o The subsidiary purchased a building on 10 April for $410,000 in cash. o Amortization of databases amounts to $30,000 per year. 42,000 $(338,000) o The parent issued stock for cash on 1 July. o The parent sold equipment with a cost of $160,000 but a $80,000 book value for cash on August 20. o During the year, the subsidiary paid dividends of $20,000. Both parent and subsidiary pay dividends in the same year as declared. The parent issued bonds during the year for cash. The only changes affecting retained earnings are net income and cash dividends paid. Required: Prepare a consolidated statement of cash flows for this business combination for the year ending December 31, 2020, using the indirect method.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Plaster, Inc., holds 80 percent of Stucco Company's outstanding common stock. The following selected consolidated financial statements information are for
2019 and 2020 (credit balances indicated by parentheses):
Plaster, Inc., and Consolidated Subsidiary Stucco
2019
2020
Retained earnings, 1/1
$(620,000)
$(762,000)
(338,000)
$(880,000)
$240,000
Net income
(262,000)
Retained earnings, 12/31
$(762,000)
Cash
$180,000
Accounts receivable
340,000
300,000
Inventory
420,000
720,000
1,420,000
310,000
$(220,000)
(1,040,000)
(122,000)
Buildings and equipment (net)
1,300,000
Databases
340,000
Accounts payable
Bonds payable
$(320,000)
(820,000)
(84,000)
(220,000)
Noncontrolling interest in Stucco
Common stock
(280,000)
Additional paid-in capital
(374,000)
(448,000)
$(2,060,000)
1,300,000
Revenues
$(1,800,000)
Cost of goods sold
1,220,000
Depreciation and amortization
Loss on sale of equipment
200,000
240,000
-0-
60,000
Interest expense
80,000
80,000
Transcribed Image Text:00,000
Consolidated net income:
to noncontrolling interest
to parent company
38,000
$(262,000)
42,000
$(338,000)
Additional Information for 2020:
o The subsidiary purchased a building on 10 April for $410,000 in cash.
o Amortization of databases amounts to $30,000 per year.
o The parent issued stock for cash on 1 July.
o The parent sold equipment with a cost of $160,000 but a $80,000 book value for cash on August 20.
o During the year, the subsidiary paid dividends of $20,000. Both parent and subsidiary pay dividends in the same year as declared.
o The parent issued bonds during the year for cash.
o The only changes affecting retained earnings are net income and cash dividends paid.
Required:
Prepare a consolidated statement of cash flows for this business combination for the year ending December 31, 2020, using the indirect method.
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