Sales Cost of goods sold Operating expenses Dividend income Net income attributable to noncontrolling interest Inventory Noncontrolling interest in subsidiary, 12/31/24 Consolidated Balance
Reporting Cash Flows
Reporting of cash flows means a statement of cash flow which is a financial statement. A cash flow statement is prepared by gathering all the data regarding inflows and outflows of a company. The cash flow statement includes cash inflows and outflows from various activities such as operating, financing, and investment. Reporting this statement is important because it is the main financial statement of the company.
Balance Sheet
A balance sheet is an integral part of the set of financial statements of an organization that reports the assets, liabilities, equity (shareholding) capital, other short and long-term debts, along with other related items. A balance sheet is one of the most critical measures of the financial performance and position of the company, and as the name suggests, the statement must balance the assets against the liabilities and equity. The assets are what the company owns, and the liabilities represent what the company owes. Equity represents the amount invested in the business, either by the promoters of the company or by external shareholders. The total assets must match total liabilities plus equity.
Financial Statements
Financial statements are written records of an organization which provide a true and real picture of business activities. It shows the financial position and the operating performance of the company. It is prepared at the end of every financial cycle. It includes three main components that are balance sheet, income statement and cash flow statement.
Owner's Capital
Before we begin to understand what Owner’s capital is and what Equity financing is to an organization, it is important to understand some basic accounting terminologies. A double-entry bookkeeping system Normal account balances are those which are expected to have either a debit balance or a credit balance, depending on the nature of the account. An asset account will have a debit balance as normal balance because an asset is a debit account. Similarly, a liability account will have the normal balance as a credit balance because it is amount owed, representing a credit account. Equity is also said to have a credit balance as its normal balance. However, sometimes the normal balances may be reversed, often due to incorrect journal or posting entries or other accounting/ clerical errors.
G
![ProForm acquired 60 percent of ClipRite on June 30, 2023, for $1,380,000 in cash. Based on ClipRite's acquisition-date fair value, an
unrecorded intangible of $840,000 was recognized and is being amortized at the rate of $21,000 per year. No goodwill was
recognized in the acquisition. The noncontrolling interest fair value was assessed at $920,000 at the acquisition date. The 2024
financial statements are as follows:
Items
Sales
Cost of goods sold
Operating expenses
Dividend income
Net income
Retained earnings, 1/1/24
Net income
Dividends declared
Retained earnings, 12/31/24
Cash and receivables
Inventory
Investment in ClipRite
Fixed assets
Accumulated depreciation
Totals
Liabilities
Common stock
Retained earnings, 12/31/24
Totals
Note: Parentheses indicate a credit balance.
ProForm
$ (1,050,000)
660,000
350,000
(60,000)
$ (100,000)
ClipRite
$ (1,100,000)
525,000
225,000
0
$ (350,000)
$ (3,400,000) $ (1,100,000)
(100,000)
350,000
(350,000)
100,000
$ (3,150,000) $ (1,350,000)
$ 550,000
$ 650,000
540,000
1,380,000
2,400,000
(600,000)
950,000
0
$ 4,370,000
$ (720,000)
(500,000)
(3,150,000)
$ (4,370,000)
1,850,000
(800,000)
$ 2,550,000
$ (700,000)
(500,000)
(1,350,000)
$ (2,550,000)
ProForm sold ClipRite inventory costing $94,000 during the last six months of 2023 for $170,000. At year-end, 30 percent remained.
ProForm sold ClipRite inventory costing $325,000 during 2024 for $500,000. At year-end, 10 percent is left.
Required:
With these facts, determine the consolidated balances for the following:
Note: Input all amounts as positive values.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F54a21531-200a-421f-b4c0-da600bfa5a98%2Fa5be05d3-d647-4a4a-86ae-712a712b6991%2Fhy5wnqo_processed.png&w=3840&q=75)
![Sales
Cost of goods sold
Operating expenses
Dividend income
Net income attributable to noncontrolling interest
Inventory
Noncontrolling interest in subsidiary, 12/31/24
Consolidated
Balance](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F54a21531-200a-421f-b4c0-da600bfa5a98%2Fa5be05d3-d647-4a4a-86ae-712a712b6991%2Fav9sdd_processed.png&w=3840&q=75)
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