2. Pokey Corporation acquired 80 percent ownership of Stereo Company.docx - 2 Pokey Corporation acquired 80 percent ownership of Stereo Company on

2. Pokey Corporation acquired 80 percent ownership of Stereo Company.docx

This preview shows page 1 - 8 out of 8 pages.

Image of page 1
2. Pokey Corporation acquired 80 percent ownership of Stereo Company on January 1, 20X6, at underlying book value. At that date, the fair value of the noncontrolling interest was equal to 20 percent of the book value of Stereo Company. Consolidated balance sheets at January 1, 20X8, and December 31, 20X8, are as follows: (10 points) Item Jan 1, 20X8 Dec 31, 20X8 Cash $ 50,000 $ 80,000 Accounts Receivable 75,000 90,000 Inventory 85,000 100,000 Land 60,000 80,000 Buildings and Equipment 300,000 350,000 Less: Accumulated Depreciation
Image of page 2
(90,000 ) (120,000 ) Patents 12,000 10,000 Total Assets $ 492,000 $ 590,000 Accounts Payable $ 40,000 $ 58,000 Wages Payable 20,000 16,000 Notes Payable 150,000 175,000 Common Stock ($5 par value) 100,000 100,000 Retained Earnings 162,000
Image of page 3
218,000 Noncontrolling Interest 20,000 23,000 Total Liabilities and Equities $ 492,000 $ 590,000 The consolidated income statement for 20X8 contained the following amounts: Sales $ 400,000 Cost of Goods Sold $ 172,000 Wage Expense 45,000 Depreciation Expense 30,000 Interest Expense 12,000 Amortization Expense 2,000 Other Expenses 52,000 (313,000
Image of page 4
) Consolidated Net Income
Image of page 5
Image of page 6
Image of page 7
Image of page 8

You've reached the end of your free preview.

Want to read all 8 pages?

Unformatted text preview: $ 87,000 Income to Noncontrolling Interest (6,000 ) Income to Controlling Interest $ 81,000 Pokey and Stereo paid dividends of $25,000 and $15,000, respectively, in 20X8. Required: 1) Prepare a worksheet to develop a consolidated statement of cash flows for 20X8 using the indirect method of computing cash flows from operations. (4 points) 2) Prepare a consolidated statement of cash flows for 20X8. (6 points) Item Jan 1, 20X8 Dec 31, 20X8 Cash $ 50,000 $ 80,000 Accounts Receivable 75,000 90,000 Inventory 85,000 100,000 Land 60,000 80,000 Buildings and Equipment 300,000 350,000 Less: Accumulated Depreciation (90,000 ) (120,000 ) Patents 12,000 10,000 Total Assets $ 492,000 $ 590,000 Accounts Payable $ 40,000 $ 58,000 Wages Payable 20,000 16,000 Notes Payable 150,000 175,000 Common Stock ($5 par value) 100,000 100,000 Retained Earnings 162,000 218,000 Noncontrolling Interest 20,000 23,000 Total Liabilities and Equities $ 492,000 $ 590,000...
View Full Document

  • Fall '17
  • Bob Maxwell

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern

Ask Expert Tutors You can ask You can ask ( soon) You can ask (will expire )
Answers in as fast as 15 minutes