Question

On June 30, 2018, Plaster, Inc., paid $868,000 for 80 percent of Stucco Company's outstanding stock. Plaster assessed the acquisition-date fair value of the 20 percent noncontrolling interest at $217,000. At acquisition date, Stucco reported the following book values for its assets and liabilities: Cash $ 56,800 Accounts receivable 120,400 Inventory 192,600 Land 61,800 Buildings 166,300 Equipment 284,900 Accounts payable (33,200 ) On June 30, Plaster allocated the excess acquisition-date fair value over book value to Stucco's assets as follows: Equipment (3-year remaining life) $ 71,000 Database (10-year remaining life) 164,400 At the end of 2018, the following comparative (2017 and 2018) balance sheets and consolidated income statement were available: Plaster, Inc. December 31, 2017 Consolidated December 31, 2018 Cash $ 40,200 $ 227,000 Accounts receivable (net) 338,300 453,700 Inventory 388,000 672,800 Land 280,500 342,300 Buildings (net) 229,000 346,800 Equipment (net) 1,682,500 1,909,900 Database 0 156,180 Total assets $ 2,958,500 $ 4,108,680 Accounts payable $ 75,000 $ 100,300 Long-term liabilities 375,000 1,089,620 Common stock 1,687,500 1,687,500 Noncontrolling interest 0 239,500 Retained earnings 821,000 991,760 Total liabilities and equities $ 2,958,500 $ 4,108,680 PLASTER, INC., AND SUBSIDIARY STUCCO COMPANY Consolidated Income Statement For the Year Ended December 31, 2018 Revenues $ 1,140,200 Cost of goods sold $ 690,600 Depreciation 175,400 Database amortization 8,220 Interest and other expenses 9,200 883,420 Consolidated net income $ 256,780 Additional Information for 2018 On December 1, Stucco paid a $49,600 dividend. During the year, Plaster paid $52,000 in dividends. During the year, Plaster issued $714,620 in long-term debt at par. Plaster reported no asset purchases or dispositions other than the acquisition of Stucco. Prepare a 2018 consolidated statement of cash flows for Plaster and Stucco. Use the indirect method of reporting cash flows from operating activities. (Negative amounts and amounts to be deducted should be indicated by a minus sign.

Answer 1

BS of Studco co - Jun 18 acquisition date
Assets
cash	56800
Accounts receivable	120400
inventory	192600
land	61800
building	166300
Equipment	284900	882800
data base
Liabilities
Accounts payable	33200	849600
20% fair value of non controlling interest		217000
Fair value of assets acquired		632600
acquisition cost		868000
Excess price Good will		235400
Balance sheet of Plaster Inc	Dec-17	Dec-18
Assets
cash	40200	227000
accounts receivables	338300	453700
inventory	388000	672800
land	280500	342300
building	229000	346800
equipment	1682500	1909900
database	0	156180
	2958500	4108680
Liabilities
Accounts payable	75000	100300
Long term liabilities	375000	1089620
Debenture issued	0
common stock	1687500	1687500
non controling interest		239500
Retained earnings	821000	991760
	2958500	4108680
consolidated net income
Revenue		1140200
COGS		690600
		449600
depreciation	175400
Amortization data base	8220	183620
Profit		265980
interest expenses		9200
Consolidated net income		256780

Cash flow statement to be drawn with the movement of the two balance periods drawn out

Balance sheet of Plaster Inc	Dec-17	Dec-18	Movement
Assets
cash	40200	227000	186800
accounts receivables	338300	453700	115400
inventory	388000	672800	284800
land	280500	342300	61800
building	229000	346800	117800
equipment	1682500	1909900	227400
database	0	156180	156180
	2958500	4108680	1150180
Liabilities
Accounts payable	75000	100300	25300
Long term liabilities	375000	1089620	714620
Debenture issued	0		0
common stock	1687500	1687500	0
non controling interest		239500	239500
Retained earnings	821000	991760	170760
	2958500	4108680	1150180

All outflow like dividend paid out to be indicated in negative and inflows to have positive signs

inflow from Long term debenture raised classify under financing source as inflow