A consolidated income statement for 2018 and comparative consolidated balance sheets for 2017 and 2018 for P Company and its 80% owned subsidiary follow:

Other information:

1. Equipment depreciation was $95,000.

2. Equipment was purchased during the year for cash, $545,000.

3. Dividends paid during 2018:

a. Declared and paid by S Company, $40,000.

b. Declared and paid by P Company, $60,000.

4. The bonds payable were issued on December 30, 2018, for $240,000.

5. Common stock issued during 2018, 150,000 shares.

Required:

Prepare a consolidated statement of cash flows for the year ended December 31, 2018, using the indirect method.

Transcribed Image Text:

P COMPANY AND SUBSIDIARY Consolidated Income Statement for the Year Ended December 31, 2018 Sales $1,900,000 1,000,000 Cost of goods sold Gross margin Expenses Operating income before tax 900,000 300,000 600,000 50,000 Dividend income Income before tax 550,000 Income taxes 220,000 Consolidated net income 330,000 Less: Noncontrolling interest in consolidated net income Controlling interest in consolidated net income 66,000 $ 264,000 P COMPANY Consolidated Balance Sheets December 31, 2017 and 2018 Assets 2018 2017 Cash $ 250,000 $ 300,000 Accounts receivable 360,000 250,000 Inventories 210,000 190,000 Equipment (net) Long-term investments 950,000 500,000 800,000 800,000 Goodwill 175,000 175,000 Total assets $2,745,000 $2,215,000 Liabilities and Equity $ 268,000 $ 500,000 Accounts payable Accrued payable Bonds payable Premium on bonds payable 260,000 200,000 200,000 40,000 -0- Noncontrolling interest Common stock, $1 par value Other contributed capital Retained earnings Total equities 148,000 90,000 600,000 450,000 275,000 225,000 954,000 750,000 $2,745,000 $2,215,000