Cash flow, subsequent to year of purchase. Paridon Motors purchases an 80% interest in S...

Cash flow, subsequent to year of purchase. Paridon Motors purchases an 80% interest in Snap Battery Company on January 1, 2012, for $700,000 cash. At that date, Snap Battery Company has the following stockholders’ equity:

Any excess of cost over book value is attributed to goodwill. A statement of cash flows is being prepared for 2015. For each of the following situations, indicate the impact on the cash flow statement for 2015:

1. Adjustment resulting from the original acquisition of the controlling interest.

2. Snap Battery Company issues 2,000 shares of common stock for $90 per share on January 1, 2015. At the time, the stockholders’ equity of Snap Battery is $800,000. Paridon Motors purchases 1,000 shares.

3. Paridon Motors purchases at 102, $100,000 of face value, 10% annual interest bonds issued by Snap Battery Company at face value on January 1, 2013. Paridon purchases the bonds on January 1, 2015.

4. Snap Battery purchases a production machine from Paridon Motors on July 1, 2015, for $80,000. Paridon’s cost is $60,000, and accumulated depreciation is $20,000.