The comparative consolidated statement of financial position at December 31, Year 2, and the consolidated income statement
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Question:
The comparative consolidated statement of financial position at December 31, Year 2, and the consolidated income statement for Year 2, of Parent Ltd. and its 70%-owned subsidiary, Sub, are shown below.
Year 2 | Year 1 | |
Plant and equipment | $6,650,000 | $6,400,000 |
Accumulated depreciation | (2,750,000) | (2,370,000) |
Goodwill | 543,000 | 604,000 |
Inventory | 1,033,700 | 503,000 |
Accounts receivable | 639,000 | 731,000 |
Cash | 567,200 | 348,000 |
$6,682,900 | $6,216,000 | |
Ordinary shares | $800,000 | $800,000 |
Retained earnings | 1,000,000 | 533,000 |
Non-controlling interest | 531,900 | — |
Long-term liabilities | 3,950,000 | 3,713,000 |
Current liabilities | 401,000 | 1,170,000 |
$6,682,900 | $6,216,000 | |
Revenues | $8,630,000 | |
Cost of purchases and other expenses | 8,226,000 | |
Change in inventory | (530,700) | |
Depreciation | 380,000 | |
Goodwill impairment loss | 61,000 | |
8,136,300 | ||
Profit | $ 493,700 | |
Attributable to | ||
Shareholders of Parent | $ 454,000 | |
Non-controlling interest | 39,700 | |
Additional Information
- On December 31, Year 1, Parent owned 100% of Sub. On this date, the shareholders’ equity of Sub amounted to $1,133,000, and the parent’s undepleted acquisition differential of $604,000 was allocated entirely to the goodwill of Sub.
- On January 1, Year 2, Parent sold 30% of its shares of Sub for $642,000 cash and recorded an increase to retained earnings of $120,900 on the transaction. Parent uses the equity method to account for its investment.
- Parent paid $107,900 in dividends during Year 2.
Required:
Prepare, in good form, a consolidated cash flow statement for Year 2 in accordance with the requirements of IAS 7. (Negative amounts should be indicated by a minus sign.)
Related Book For
Modern Advanced Accounting in Canada
ISBN: 978-1259087554
8th edition
Authors: Hilton Murray, Herauf Darrell
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