Pear Corporation acquired 75 percent ownership of Sugar Company on January 1, 20X1, at underlying book value. At that date, the fair value of the noncontrolling interest was equal to 25 percent of the book value of Sugar Company. Consolidated balance sheets at January 1, 20X3, and December 31, 20X3, are as follows 

The consolidated income statement for 20X3 contained the following amounts:

Pear and Sugar paid dividends of $30,000 and $20,000, respectively, in 20X3.

Required

a. Prepare a worksheet to develop a consolidated statement of cash flows for 20X3 using the indirect method of computing cash flows from operations.

b. Prepare a consolidated statement of cash flows for 20X3.

Transcribed Image Text:

Item Cash Accounts Receivable Inventory Land Buildings & Equipment Less: Accumulated Depreciation Patents Total Assets Accounts Payable Wages Payable Notes Payable Common Stock ($10 par value) Jan. 1, 20X3 $ 68,500 82,000 115,000 45,000 515,000 (186,500) 5,000 $644,000 $ 61,000 26,000 250,000 150,000 Dec. 31, 20X3 $100,500 97,000 123,000 55,000 550,000 (223,000) 4,000 $706,500 $ 66,000 20,000 265,000 150,000