Point Company holds 80 percent ownership of Shoot Company. The consolidated balance sheets as of December 31, 20X3, and December 31, 20X4, are as follows:

The 20X4 consolidated income statement contained the following amounts:

Point acquired its investment in Shoot on January 1, 20X2, for $176,000. At that date, the fair value of the noncontrolling interest was $44,000, and Shoot reported net assets of $150,000. A total of $40,000 of the differential was assigned to goodwill. The remainder of the differential was assigned to equipment with a remaining life of 20 years from the date of combination.

Point sold $100,000 of bonds on December 31, 20X4, to assist in generating additional funds. Shoot reported net income of $35,000 for 20X4 and paid dividends of $15,000. Point reported 20X4 equity-method net income of $80,000 and paid dividends of $25,000.

Required

a. Prepare a worksheet to develop a consolidated statement of cash flows for 20X4 using the indirect method of computing cash flows from operations.

b. Prepare a consolidated statement of cash flows for 20X4.

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Cash Accounts Receivable Inventory Land Buildings & Equipment Less: Accumulated Depreciation Goodwill Total Assets Accounts Payable Interest Payable Bonds Payable Bond Premium Noncontrolling Interest Common Stock Additional Paid-In Capital Retained Earnings Total Liabilities & Owners' Equity Dec. 31, 20X3 $ 83,000 210,000 320,000 190,000 850,000 (280,000) 40,000 $1,413,000 $ 52,000 45,000 400,000 18,000 40,000 300,000 70,000 488,000 $1,413,000 Dec. 31, 20X4 $ 181,000 175,000 370,000 160,000 980,000 (325,000) 28,000 $1,569,000 74,000 30,000 500,000 16,000 44,000 300,000 70,000 535,000 $1,569,000 $