On June 30, 2018, Plaster, Inc., paid $804,000 for 80 percent of Stucco Company's outstanding stock. Plaster assessed the acquisition-date fair value of the 20 percent noncontrolling interest at $201,000. At acquisition date, Stucco reported the following book values for its assets and liabilities:
Cash | $ | 52,800 | |
Accounts receivable | 111,600 | ||
Inventory | 178,200 | ||
Land | 57,000 | ||
Buildings | 153,500 | ||
Equipment | 263,300 | ||
Accounts payable | (30,800 | ) | |
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) | $ | 66,200 |
Database (10-year remaining life) | 153,200 | |
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 | $ | 37,800 | $ | 213,400 | ||||
Accounts receivable (net) | 318,300 | 426,500 | ||||||
Inventory | 364,800 | 632,800 | ||||||
Land | 263,700 | 320,700 | ||||||
Buildings (net) | 215,400 | 325,200 | ||||||
Equipment (net) | 1,582,500 | 1,790,700 | ||||||
Database | 0 | 145,540 | ||||||
Total assets | $ | 2,782,500 | $ | 3,854,840 | ||||
Accounts payable | $ | 70,200 | $ | 93,900 | ||||
Long-term liabilities | 351,000 | 1,042,740 | ||||||
Common stock | 1,579,500 | 1,579,500 | ||||||
Noncontrolling interest | 0 | 224,300 | ||||||
Retained earnings | 781,800 | 914,400 | ||||||
Total liabilities and equities | $ | 2,782,500 | $ | 3,854,840 | ||||
PLASTER, INC., AND SUBSIDIARY STUCCO COMPANY Consolidated Income Statement For the Year Ended December 31, 2018 |
|||||||||
Revenues | $ | 1,069,800 | |||||||
Cost of goods sold | $ | 648,200 | |||||||
Depreciation | 165,000 | ||||||||
Database amortization | 7,660 | ||||||||
Interest and other expenses | 8,400 | 829,260 | |||||||
Consolidated net income | $ | 240,540 | |||||||
Additional Information for 2018
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.)
Cash flow statement | ||
Cash flows form operating activities | ||
consolidated net income | $ 240,540.00 | |
depreciation expense | $ 165,000.00 | |
amortization expense | $ 7,660.00 | |
decrease in Accounts receivable | $ 3,400.00 | |
318300+111600-426500 | ||
increase in inventory | $ (89,800.00) | |
364800+178200-632800 | ||
decrease in Accounts payable | $ (7,100.00) | |
93900-70200+-30800 | ||
$ 79,160.00 | ||
net cash flow provided by operating activities | $ 319,700.00 | |
Cash flow from investing activities | ||
purchase of stucco company assets | $ (751,200.00) | |
cash flows from financing activities | ||
issue of long term debt | $ 691,740.00 | |
dividends | $ (84,640.00) | |
76000+43200*0.2 | ||
net cash flow provided by financing activities | $ 607,100.00 | |
increase in cash | $ 175,600.00 | |
beginning cash balance | $ 37,800.00 | |
ending cash balance | $ 213,400.00 |
On June 30, 2018, Plaster, Inc., paid $804,000 for 80 percent of Stucco Company's outstanding stock....
On June 30, 2018, Plaster, Inc., paid $868,000 for 80 percent of Stucco Company's outstanding stock. Plaster assessed the acquisition-date fair value of the 20 percent noncontrolling interest at $217,000. At acquisition date, Stucco reported the following book values for its assets and liabilities: Cash $ 56,800 Accounts receivable 120,400 Inventory 192,600 Land 61,800 Buildings 166,300 Equipment 284,900 Accounts payable (33,200 ) On June 30, Plaster allocated the excess acquisition-date fair value over book value to Stucco's assets as follows:...
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