Preparation of Statement of Cash Flows
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 in good form a statement of cash flows for Consolidated Enterprises Inc. using the indirect method of computing cash flows from operations.
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