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Q: 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

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. Roller’s balance sheet on the date of the purchase is as follows:

Banner Company acquires an 80% interest in Roller Company for

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.

Banner Company acquires an 80% interest in Roller Company for

Assets Liabilities and Equity 140,000 Bonds payable. Inventory.... Property, plant, and equipment (net) Total assets.... . Common stock ($10 par)... 300,000 .. .. . . ..........$710,000 Total liabilities and equity$710,000 Banner Company December 31, 2012 Consolidated December 31, 2013 $300,000 220,000 800,000 219,000 454,000 1,230,000 300,000 (284,000) (300,000) (169,000) (250,000) (600,000) (600,000) ash ..-.... Inventory. Property, plant, and equipment (net) . . . . (160,000) (200,000) Bonds payable.... Controlling common stoc ($10 par . . . . _ . (200,000) (300,000) (460,000) Retained earnings Totals.. .

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Determination and Distribution of Excess Schedule Investment in Roller Company Company Parent NCI Implied Price Value Fair Value 80 20 Fair value of s... View full answer

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