Marion Company is an 80% owned subsidiary of Lange Company. The interest in Marion is purchased on January 1, 2015, for $680,000 cash. The fair value of the NCI was $170,000. At that date, Marion has stockholders' equity of $650,000. The excess price is attributed to equipment with a 5-year life undervalued by $50,000 and to goodwill.
The following comparative consolidated trial balances apply to Lange Company and its subsidiary, Marion:

The 2016 information shown on page 362 is available for the Lange andMarion companies.
a. Marion purchases equipment for $70,000.
b. Marion issues $350,000 of long-term bonds and later uses the proceeds to purchase a new building.
c. On January 1, 2016, Lange purchases 30% of the outstanding common stock of Charles Corporation for $230,000. This is an influential investment. Charles's stockholders' equity is $700,000 on the date of the purchase. Any excess cost is attributed to equipment with a 10-year life. Charles reports net income of $80,000 in 2016 and pays dividends of $25,000.
d. Controlling share of consolidated income for 2016 is $262,000; the noncontrolling interest in consolidated net income is $15,000. Lange pays $100,000 in dividends in 2016; Marion pays $15,000 in dividends in 2016.
Required
Prepare the consolidated statement of cash flows for 2016 using the indirect method. Any supporting calculations (including a determination and distribution of excess schedule) should be in good form.

Transcribed Image Text:

December 31, 2015 December 31 2016 24,500 160,000 300,000 3,450,000 (1,292,000 244,500 150,000 200,000) 450,000) (179,000) Cash 16,000 120,000 200,000 3,030,000 (1,086,000) Accounts Receivable Accumulated Depreciation . . . . ·..·.. . Investment in Charles Corporation (30%) Goodwill Accounts Payable Bonds Payable Noncontrolling Interest Controlling Interest: . 150,000 (117,000) (100,000) (167,000) Common Stock (par) Additional Paid-In Capital in Excess of Par. Retained Earnings (1,000,000) (650,000) (396,000] 0 1,000,000) (650,000) 558,000 0