Comparative consolidated financial statements for Pes Corporation and its 90 percent-owned subsidiary, Sun Corporation, at and for the years ended December 31 are as follows:

REQUIRED: Prepare a consolidated statement of cash flows for Pes Corporation and Subsidiary for the year ended December 31, 2011, using either the indirect method or the direct method. All changes in plant assets are due to asset acquisitions and depreciation. Sun's net income and dividends for 2011 are $50,000 and $20,000,respectively.

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Controlling share of income Add: Beginning retained earnings 130 190 100 130 30 60 Less: Dividends (40) (40) S 280 $190 $ 90 Ending Retained Earnings Balance Sheets at December 31 Assets Cash $ 55.5 $ 65 $ (9.5 Accounts receivable-net 85 140 80 120 Inventories 20 Other current assets Plant and equipment-net Patents Total assets 100 674 81 600 19 74 19 19.5 (5 S108 $1,073.5 $965.5 Equities Accounts payable Dividends payable Long-term liabilities Capital stock Other paid-in capital Retained earnings Noncontrolling interest-10% Total equities $ 22 $ 85 21 $ 63 17 35 500 46 500 (11) 120 280 120 190 90 32.5 29.5 S108 $1,073.5 $965.5