The accountant for Consolidated Enterprises Inc. has just
finished preparing a consolidated balance sheet, income statement,
and statement of changes in retained earnings for 20X3. The
accountant has asked for assistance in preparing a statement of
cash flows for the consolidated entity. Consolidated Enterprises
holds 80 percent of the stock of Separate Way Manufacturing. The
following items are proposed for inclusion in the consolidated cash
flow statement:
Decrease in accounts receivable | $ | 23,000 | |
Increase in accounts payable | 5,000 | ||
Increase in inventory | 15,000 | ||
Increase in bonds payable | 120,000 | ||
Equipment purchased | 380,000 | ||
Common stock repurchased | 35,000 | ||
Depreciation reported for current period | 73,000 | ||
Gain recorded on sale of equipment | 8,000 | ||
Book value of equipment sold | 37,000 | ||
Goodwill impairment loss | 3,000 | ||
Sales | 900,000 | ||
Cost of goods sold | 368,000 | ||
Dividends paid by parent | 60,000 | ||
Dividends paid by subsidiary | 30,000 | ||
Consolidated net income for the year | 464,000 | ||
Income assigned to the noncontrolling interest | 14,000 | ||
Required:
Prepare a statement of cash flows for Consolidated Enterprises Inc.
using the direct method of computing cash flows from operating
activities.
Cash flows from Operating activities | ||
Direct Method | ||
Particular | Amount | |
Cash Received From Customers | $ 923,000.00 | |
A) Sales | $ 900,000.00 | |
Add - Decrease in Account receivables | $ 23,000.00 | |
Cash Paid to Suppliers | ||
B)Cost of Goods sold | $ (368,000.00) | |
Less- Increase in inventory | $ (15,000.00) | |
Add-Increase in Accounts Payable | $ 5,000.00 | $ (378,000.00) |
Net cash Inflow from Operating activities | $ 545,000.00 | |
Consolidated Enterprises holds 80 percent of the stock of Separate Way Manufacturing | $ 436,000.00 |
The accountant for Consolidated Enterprises Inc. has just finished preparing a consolidated balance sheet, income statement,...
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