Consolidated Statement of Cash Flows
Sun Corporation was created on January 1, 20X2, and quickly became successful. On January 1, 20X6, its owner sold 80 percent of the stock to Weatherbee Company at underlying book value. At the date of that sale, the fair value of the remaining shares was equal to 20 percent of the book value of Weatherbee. Weatherbee continued to operate the subsidiary as a separate legal entity and used the equity method in accounting for its investment in Sun. The following consolidated financial statements have been prepared:
WEATHERBEE COMPANY ANDSUBSIDIARY Consolidated Balance Sheets | ||
| January 1, 20X6 | December 31, 20X6 |
Cash | $ 54,000 | $ 75,000 |
Accounts Receivable | 121,000 | 111,000 |
Inventory | 230,000 | 360,000 |
Land | 95,000 | 100,000 |
Buildings and Equipment | 800,000 | 650,000 |
Less: Accumulated Depreciation | (290,000) | (230,000) |
Total Assets | $1,010,000 | $1,066,000 |
Accounts Payable | $ 90,000 | $ 105,000 |
Bonds Payable | 300,000 | 250,000 |
Noncontrolling Interest | 30,000 | 38,000 |
Common Stock | 300,000 | 300,000 |
Retained Earnings | 290,000 | 373,000 |
Total Liabilities and Owners’ Equity | $1,010,000 | $1,066,000 |
WEATHERBEE COMPANY AND SUBSIDIARY Consolidated Income Statement Year Ended December 31, 20X6 | |
Sales | $1,070,000 |
Gain on Sale of Equipment | 30,000 |
| $1,100,000 |
Cost of Goods Sold | $ 750,000 |
Depreciation Expense | 40,000 |
Other Expenses | 150,000 |
Total Expenses | $ (940,000) |
Consolidated Net Income | $ 160,000 |
Income to Noncontrolling Interest | (12,000) |
Income to Controlling Interest | $ 148,000 |
WEATHERBEE COMPANY AND SUBSIDIARY Consolidated Retained Earnings Statement Year Ended December 31, 20X6 | |
Balance, January 1, 20X6 | $290,000 |
Income to Controlling Interest | 148,000 |
| $438,000 |
Dividends Declared, 20X6 | (65,000) |
Balance, December 31, 20X6 | $373,000 |
During 20X6, Sun reported net income of $60,000 and paid dividends of $20,000; Weatherbee reported net income of $148,000 and paid dividends of $65,000. There were no intercompany transfers during the period.
Required
Prepare a worksheet for a consolidated statement of cash flows for 20X6 using the indirect method of computing cash flows from operations.
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