Badco Inc. purchased a 90% interest in Lazytoo Company for $600,000 cash on January 1, 2021. Any excess of implied over book value was attributed to depreciable assets with a 15-year remaining life (straight-line depreciation). To help pay for the acquisition, Badco issued $300,000, 20-year, 12% bonds at par value. Lazytoo?s balance sheet on the date of acquisition was as follows:

Consolidated net income for 2021 was $155,889. Badco declared and paid dividends of $10,000 and Lazytoo declared and paid dividends of $5,000. There were no purchases or sales of property, plant, and equipment during the year.

At the end of 2021, the following information was also available:

Required:

Prepare a consolidated statement of cash flows using the indirect method for Badco and its subsidiary for the year ended December 31, 2021.

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Liabilities and Equity Assets Accrued payables Bonds payable Common stock ($10 par) Retained earnings Total liabilities and equity Cash $ 10,000 $ 90,000 100,000 200,000 Inventory Fixed assets (net) 140,000 540,000 300,000 Total assets $690,000 $690,000 Badco Company 12/31/20 Consolidated 12/31/21 Debits Debits Credits Credits $ 390,000 $ 63,500 Cash Inventory Fixed Assets Accrued payables Bonds payable Noncontrolling interest Common Stock, ($10 par) Additional paid-in-capital Retained earnings 190,000 1,385,555 750,000 150,000 200,000 111,000 600,000 73,055 200,000 200,000 550,000 230,000 369,000 $1,903,055 $1,903,055 Total $1,330,000 $1,330,000