Additional Information for 2018 The parent issued bonds during the year for cash. Amortization of databases amounts to $26,000 per year. The parent sold a building with a cost of $102,000 but a $51,000 book value for cash on May 11 . The subsidiary purchased equipment on July 23 for $249,000 in cash .Late in November, the parent issued stock for cash During the year, the subsidiary paid dividends of $52,000. Both parent and subsidiary pay dividends in the same year as declared. Prepare a consolidated statement of cash flows for this business combination for the year ending December 31, 2018. (Use indirect method) (Negative amounts and amounts to be deducted should be indicated by a minus sign.)
BOLERO COMPANY AND CONSOLIDATED SUBSIDIARY RIVERA Consolidated Statement of Cash Flows Year Ending December 31, 2018 Cash from operating activities: Consolidated net income Adjustment from accrual to cash Depreciation and amortization Gain on sale of building Decrease in accounts receivable Increase in inventory Decrease in accounts payable Net cash flow from operating activities Cash flows from investing activities Sale of building Purchase of equipment Net cash flow from investing activities Cash flows from financing activities Dividends declared Issuance of bonds Issuance of common stock Net cash flow from financing activities et increase in cash during 2018 Cash, January 1, 2018 Cash, December 31, 2018 0
Homework Answers
| Consolidated statement of cash flow | |||||
| year ending december 31, 2018 | |||||
| Cash from operating activities | |||||
| Consolidated net income | 272000 | ||||
| adjustment from accrual to cash | |||||
| depreciation & amortization | 142000 | ||||
| gain on sale of building | -41000 | ||||
| decrease in accounts receivable | 31000 | ||||
| increase in inventory | -161000 | ||||
| decrease in accounts payable | -31000 | ||||
| net cash flow from operating activities | 212000 | ||||
| Cash flow from investing activities | |||||
| Sale of building | 92000 | ||||
| purchase of equipment | -249000 | ||||
| net cash flow from investing activities | -157000 | ||||
| Cash flow from financing activities | |||||
| dividend declared (25%*52000+121000) | -134000 | ||||
| issuance of bonds | 121000 | ||||
| issuance of common stock(11000+48000) | 59000 | ||||
| net cash flow from financing activities | 46000 | ||||
| Net increase in cash | 101000 | ||||
| cash at january 1 2018 | 101000 | ||||
| cash , december 31, 2018 | 202000 | ||||
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Additional Information for 2018 The parent issued bonds during the year for cash. Amortization of...
Bolero Company holds 80 percent of the common stock of Rivera, Inc., and 40 percent of...
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Bolero Company holds 80 percent of the common stock of Rivera, Inc., and 30 percent of...
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Inc., and 30 percent of this subsidiary’s convertible bonds. The
following consolidated financial statements are for 2017 and
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2017
2018
Revenues
$
(920,000
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$
(1,050,000
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Cost of goods sold
614,000
654,000
Depreciation and amortization
104,000
128,000
Gain on sale of building
0
(34,000
)
Interest expense
44,000
44,000
Consolidated net income
(158,000
)
(258,000
)
to noncontrolling interest
23,000
25,000
to parent company
$
(135,000
)...
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Bolero Company holds 80 percent of the common stock of Rivera,
Inc., and 30 percent of this subsidiary’s convertible bonds. The
following consolidated financial statements are for 2017 and
2018:
2017
2018
Revenues
$
(920,000
)
$
(1,050,000
)
Cost of goods sold
614,000
654,000
Depreciation and amortization
104,000
128,000
Gain on sale of building
0
(34,000
)
Interest expense
44,000
44,000
Consolidated net income
(158,000
)
(258,000
)
to noncontrolling interest
23,000
25,000
to parent company
$
(135,000
)...
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