A.

Item
Cash
Accounts Receivable
Inventory
Land
Buildings and Equipment
Patents

Accumulated Depreciation
Accounts Payable
Wages Payable
Notes Payable
Common Stock
Retained Earnings
Noncontrolling Interest

Cash Flows from Operating Activities:

Consolidated Net Income
Depreciation Expense
Amortization of Patent
Increase in Accounts Receivable
Increase in Inventory
Increase in Accounts Payable
Decrease in Wages Payable

Metal Corporation and Ocean Company

Consolidated Cash Flow Worksheet
Year Ended December 31, 20X3
Balance
1/1/X3
Debit
68,500 (a)
82,000 (b)
115,000 (c)
45,000 (d)
515,000 (e)
5,000
830,500
186,500
61,000
26,000 (i)
250,000
150,000
130,000 (k)
27,000 (m)
830,500

32,000
15,000
8,000
10,000
35,000
(f)

(g)
(h)
6,000
(j)
30,000 (l)
5,000 (l)
141,000

(l)
(g)
(f)

83,500
36,500
1,000
(b)
(c)

(h)

5,000
(i)

Cash Flows from Investing Activities:

Purchase of Land
Purchase of Buildings and Equipment
Cash Flows from Financing Activities:
Increase in Notes Payable
Dividends Paid:
To Metal Corporation Shareholders
To Ocean Company Shareholders
Increase in Cash

(d)
(e)

(j)

15,000
(k)
(m)
(a)
141,000
-

Control
Metal Corporation and Subsidiary
Consolidated Statement of Cash Flows
Year Ended December 31, 20X3

B.

Cash Flows from Operating Activities

Consolidated Net Income

83,500

Noncash Expenses, Revenue, Losses, and Gains

Included in Income:
Depreciation Expense
Amortization Expense
Increase in Accounts Receivable
Increase in Inventory
Increase in Accounts Payable
Decrease in Wages Payable
Net Cash Provided by Operating Activities

36,500
1,000
15,000
8,000
5,000
6,000

Cash Flows from Investing Activities:

Purchase of Land
Purchase of Buildings and Equipment
Net Cash Used in Investing Activities

10,000
35,000

Cash Flows from Financing Activities:

Increase in Notes Payable
Dividends Paid to Parent Company Shareholders
Dividends Paid to Noncontrolling Shareholders
Net Cash Used in Financing Activities
Net Increase in Cash
Cash at Beginning of Year
Cash at End of Year
control

15,000
30,000
5,000

Balance
12/31/X3

Credit

1,000

36,500
5,000
15,000
74,500
9,000
141,000

15,000
8,000
6,000

10,000
35,000

30,000
5,000
32,000
141,000
-

97,000

45,000

100,500
97,000
123,000
55,000
550,000
4,000
929,500
223,000
66,000
20,000
265,000
150,000
174,500
31,000
929,500

Windows User:
Be careful.

20,000
32,000
68,500
100,500
-

Equity method entiries

Investment in cooper Co.
319500
Cash
Record pucahse of cooper company stock
Investment in cooper co.
Income from cooper co
Record equity-method income

27000

Cash

13500

319500

27000

Investment in cooper co

13500

Eliminating entries
1 Sales

90000
Total expenses
Dividend declared
Retained earnings

Original book value

+Net income
- Dividend declared
Ending book value

NCI
10%
35,500
3,000
1,500 37,000

2 Common stock
Add paid in capital
Retained earnings
Income from cooper co
NCI in NI
Dividend declared
Investment in cooper co
NCI in NA

80000
5000
5000
High beam
Corp
90%
319,500
27,000
13,500
333,000

Common
stock
=
160,000

160,000

160,000
40,000
155,000
27,000
3,000
- 15,000
- 333,000
- 37,000

Add paid in
capital

Retained
earnings

40,000
40,000

155,000
30,000
15,000
170,000

Sales
COGS
Gross profit
Gross profit (%)

Total
= Re-sold
+ Ending inventory
90,000
30,000
60,000
60,000
20,000
40,000
30,000
10,000
20,000
33%

Elininate inventory purchase

Sales
COGS
Inventory

90,000
70,000
20,000

Eliminate tax expense on unrealized profit on inventory transfer

Deffered tax asset
8,000
Income tax expense
8,000
Eliminate gain on sale of land
Gain on sale of land
Land

100,000
100,000

Eliminate tax expense on unrealized profit on land transfer

Deffered tax asset
40,000
Income tax expense
40,000