In: Accounting
Andies Co. held 80% of the common stock of Breaver Inc. and 40% of this subsidiary's convertible bonds. The following consolidated financial statements were for 2010 and 2011.
2010 | 2011 | |
Revenues | $1,064,000 | $1,232,000 |
Cost of goods sold | (714,000) | (756,000) |
Depreciation and amortization | (126,000) | (140,000) |
Gain on sale of building | 0 | 28,000 |
Interest expense | (42,000) | (42,000) |
Non-controlling interest | 12,600 | 15,400 |
Net income to controlling interest | $169,400 | $306,600 |
Retained earnings, Jan 1 | $420,000 | $519,400 |
Net income (from above) | 169,400 | 306,600 |
Dividends paid | (70,000) | (140,000) |
Retained earnings, Dec 31 | $519,400 | $686,000 |
Cash | $112,000 | $196,000 |
Accounts receivable | 210,000 | 196,000 |
Inventory | 280,000 | 476,000 |
Buildings and equipment (net) | 896,000 | 966,000 |
Database | 210,000 | 203,000 |
Total assets | $1,708,000 | $2,037,000 |
Accounts payable | $196,000 | $140,000 |
Bonds payable | 560,000 | 720,000 |
Non-controlling interest | 44,800 | 57,400 |
Common stock | 140,000 | 168,000 |
Additional paid-in capital | 247,800 | 265,600 |
Retained earnings, Dec 31 | 519,400 | 686,000 |
Total liabilities and stockholders' equity | $1,708,000 | $2,037,000 |
Additional information:
1. Bonds were issued during 2011 by the parent for cash.
2. Amortization of a database acquired in the original combination amounted to $7,000 per year.
3. A building with a cost of $84,000 but a $42,000 book value was sold by the parent for cash on May 11, 2011.
4. Equipment was purchased by the subsidiary on July 23, 2011, using cash.
5. Late in November 2011, the parent issued common stock for cash.
6. In 2011, the subsidiary paid dividends of $14,000.
Required:
Prepare a consolidated statement of cash flows (indirect method) for this business combination for the year ending December 31.