2. Allen Co. held 80% of the common stock of Brewer Inc. and 40% of this...

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2. Allen Co. held 80% of the common stock of Brewer Inc. and 40% of this subsidiarys convertible bonds. The following consol

Accounts payable Bonds payable Non-controlling interest in Brewer Inc. Common stock Additional paid-in capital Retained earni

business accounting

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Answer 1

Answer #1


STATEMENT OF CASH FLOW
	Amount in $	Amount in $
Net income		$ 3,06,600
Cash flows from operating activities
Adjustment for non cash effects:
Depreciation Expenses	$ 14,000
Amortization of Database	$ 7,000
Gain on the sale of Building	$ -28,000
Changes in Operating assets and liabilities:
Decrease in Account receivables	$ 14,000
Increase in Inventory	$ -1,96,000
Decrease in Account Payable	$ -56,000
		$ -2,45,000

Net cash from operating activities		$ 61,600

Cash flows from investing activities
Sale of Building (42,000 + 28,000)	$ 70,000
Purchase of Equipment (966,000-(896,000-42000))	$ -1,12,000
Purchase of long term investment
Net cash used in investing activities		$ -42,000

Cash flows from Financing activities
Issue of Bonds	$ 1,60,000
Increase in non controlling interest	$ 12,600
Payment of Cash Dividends	$ -1,40,000
Dividend received from subsidiary	$ -14,000
Issue of Common Stock	$ 45,800

Net cash used in financing activities		$ 64,400

Net increase in cash and cash equivalents		$ 84,000

Add :Cash and cash equivalents at beginning of period		$ 1,12,000

Cash and cash equivalents at end of period		$ 1,96,000

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Answer 2

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