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On June 30, 2018, Plaster, Inc., paid $812,000 for 80 percent of Stucco Company's outstanding stock....

On June 30, 2018, Plaster, Inc., paid $812,000 for 80 percent of Stucco Company's outstanding stock. Plaster assessed the acquisition-date fair value of the 20 percent noncontrolling interest at $203,000. At acquisition date, Stucco reported the following book values for its assets and liabilities:

Cash $ 53,300
Accounts receivable 112,700
Inventory 180,000
Land 57,600
Buildings 155,100
Equipment 266,000
Accounts payable (31,100 )

On June 30, Plaster allocated the excess acquisition-date fair value over book value to Stucco's assets as follows:

Equipment (3-year remaining life) $ 66,800
Database (10-year remaining life) 154,600

At the end of 2018, the following comparative (2017 and 2018) balance sheets and consolidated income statement were available:

Plaster, Inc.
December 31, 2017		 Consolidated
December 31, 2018
Cash $ 38,100 $ 215,100
Accounts receivable (net) 320,800 429,900
Inventory 367,700 637,800
Land 265,800 323,400
Buildings (net) 217,100 327,900
Equipment (net) 1,595,000 1,805,600
Database 0 146,870
Total assets $ 2,804,500 $ 3,886,570
Accounts payable $ 70,800 $ 94,700
Long-term liabilities 354,000 1,059,600
Common stock 1,593,000 1,593,000
Noncontrolling interest 0 226,200
Retained earnings 786,700 913,070
Total liabilities and equities $ 2,804,500 $ 3,886,570
PLASTER, INC., AND SUBSIDIARY STUCCO COMPANY
Consolidated Income Statement
For the Year Ended December 31, 2018
Revenues $ 1,078,600
Cost of goods sold $ 653,500
Depreciation 166,300
Database amortization 7,730
Interest and other expenses 8,500 836,030
Consolidated net income $ 242,570


Additional Information for 2018

  • On December 1, Stucco paid a $44,000 dividend. During the year, Plaster paid $84,000 in dividends.
  • During the year, Plaster issued $705,600 in long-term debt at par.
  • Plaster reported no asset purchases or dispositions other than the acquisition of Stucco.

Prepare a 2018 consolidated statement of cash flows for Plaster and Stucco. Use the indirect method of reporting cash flows from operating activities. (Negative amounts and amounts to be deducted should be indicated by a minus sign.)

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ekkarill92 answered 1 year ago
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