On June 30, 2011, Plaster, Inc., paid $916,000 for 80 percent of Stucco Company€™s outstanding stock. Plaster assessed the acquisition-date fair value of the 20 percent noncontrolling interest at $229,000. At acquisition date, Stucco reported the following book values for its assets and liabilities:
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 60,000
Accounts receivable . . . . . . . . . . . . . . . . 127,000
Inventory . . . . . . . . . . . . . . . . . . . . . . . . 203,000
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . 65,000
Buildings . . . . . . . . . . . . . . . . . . . . . . . . 175,000
Equipment . . . . . . . . . . . . . . . . . . . . . . . 300,000
Accounts payable . . . . . . . . . . . . . . . . . (35,000)

On June 30, Plaster allocated the excess acquisition-date fair value over book value to Stucco€™s assets as follows:
Equipment (3-year life) . . . . . . . . . . . . . . $ 75,000
Database (10-year life) . . . . . . . . . . . . . . 175,000

At the end of 2011, the following comparative (2010 and 2011) balance sheets and consolidated income statement were available:

Additional Information for 2011
€¢ On December 1, Stucco paid a $40,000 dividend. During the year, Plaster paid $100,000 in dividends.
€¢ During the year, Plaster issued $800,000 in long-term debt at par.
€¢ Plaster reported no asset purchases or dispositions other than the acquisition of Stucco.
Prepare a 2011 consolidated statement of cash flows for Plaster and Stucco. Use the indirect method of reporting cash flows from operatingactivities.

Transcribed Image Text:

Plaster, Inc. Consolidated December 31, 2011 S 242,850 485,400 720,000 365,000 370,000 2,037,500 166,250 $4,387.000 $ 107,000 1,200,000 1,800,000 255,500 1024,500 54.387.000 December 31, 2010 Cash Accounts receivable (net) Inventory Land Buildings (net) Equipment (net) Database $ 43,000 362,000 415,000 300,000 245,000 1,800,000 $3,165,000 $ 80,000 400,000 1,800,000 Total assets Accounts payable Long-term liabilities Common stock Noncontrolling interest Retained earnings 885,000 $3,165,000 Total liabilities and equities PLASTER, INC., AND SUBSIDIARY STUCCO COMPANY Consolidated Income Statement For the Year Ended December 31, 2011 $1,217,500 Revenues Cost of goods sold Depreciation Database amortization Interest and other expenses $737,500 187,500 8,750 9,750 943,500 $ 274,000 Consolidated net income