Hat Company holds 70 percent of the common stock of Ties, Inc., and 30 percent...
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Accounting
Hat Company holds 70 percent of the common stock of Ties, Inc., and 30 percent of this subsidiarys convertible bonds. The following consolidated financial statements are for 2017 and 2018:
2017
2018
Revenues
$
(895,000
)
$
(1,025,000
)
Cost of goods sold
609,000
649,000
Depreciation and amortization
99,000
118,000
Gain on sale of building
0
(29,000
)
Interest expense
39,000
39,000
Consolidated net income
(148,000
)
(248,000
)
to noncontrolling interest
18,000
19,500
to parent company
$
(130,000
)
$
(228,500
)
Retained earnings, 1/1
$
(309,000
)
$
(380,000
)
Net income
(130,000
)
(228,500
)
Dividends declared
59,000
109,000
Retained earnings, 12/31
$
(380,000
)
$
(499,500
)
Cash
$
89,000
$
168,000
Accounts receivable
168,000
149,000
Inventory
209,000
358,000
Buildings and equipment (net)
649,000
717,000
Databases
168,000
154,000
Total assets
$
1,283,000
$
1,546,000
Accounts payable
$
(149,000
)
$
(117,500
)
Bonds payable
(409,000
)
(518,000
)
Noncontrolling interest in Ties
(41,000
)
(50,000
)
Common stock
(118,000
)
(139,000
)
Additional paid-in capital
(186,000
)
(222,000
)
Retained earnings
(380,000
)
(499,500
)
Total liabilities and equities
$
(1,283,000
)
$
(1,546,000
)
Additional Information for 2018
The parent issued bonds during the year for cash.
Amortization of databases amounts to $14,000 per year.
The parent sold a building with a cost of $78,000 but a $39,000 book value for cash on May 11.
The subsidiary purchased equipment on July 23 for $211,000 in cash.
Late in November, the parent issued stock for cash.
During the year, the subsidiary paid dividends of $35,000. 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: Adjustment from accrual to cash: Net cash flow from operating activities Cash flows from investing activities: Net cash fow from investing activities Cash flows from financing activities Net cash flow from financing activities Cash, January 1, 2018 Cash, December 31, 2018
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