Banner Company acquires an 80% interest in Roller Company for $640,000 cash on January 1, 2013. The NCI has a
Banner Company acquires an 80% interest in Roller Company for $640,000 cash on January 1, 2013. The NCI has a fair value of $160,000. Any excess of cost over book value is attributed to goodwill. To help pay for the acquisition, Banner Company issues 5,000 shares of its common stock with a fair value of $70 per share. Rollerâ€™s balance sheet on the date of the purchase is as follows:
Controlling share of net income for 2013 is $150,000, net of the non-controlling interest of $10,000. Banner declares and pays dividends of $10,000, and Roller declares and pays dividends of $5,000. There are no purchases or sales of property, plant, or equipment during the year. Based on the following information, prepare a statement of cash flows using the indirect method for Banner Company and its subsidiary for the year ended December 31, 2013. Any supporting schedules should be in good form.
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
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