Please help The accountant for Consolidated Enterprises Inc. has just finished p
ID: 2560093 • Letter: P
Question
Please help
The accountant for Consolidated Enterprises Inc. has just finished preparing a consolidated balance sheet, income statement, and statement of changes in retained earnings for 20X3. The accountant has asked for assistance in preparing a statement of cash flows for the consolidated entity. Consolidated Enterprises holds 80 percent of the stock of Separate Way Manufacturing. The following items are proposed for inclusion in the consolidated cash flow statement:
Prepare a statement of cash flows for Consolidated Enterprises Inc. using the indirect method of computing cash flows from operations.
The accountant for Consolidated Enterprises Inc. has just finished preparing a consolidated balance sheet, income statement, and statement of changes in retained earnings for 20X3. The accountant has asked for assistance in preparing a statement of cash flows for the consolidated entity. Consolidated Enterprises holds 80 percent of the stock of Separate Way Manufacturing. The following items are proposed for inclusion in the consolidated cash flow statement:
Explanation / Answer
CASH FROM OPERATIONS $ Net Income $412,000 Depreciation & amortization 57,000 Goodwill Impairment loss 3,000 Change in accounts receivable 17,000 Change in inventory (21,000) Change in accounts payable 7,000 Cash from operations $ 475,000 CASH FOR INVESTMENTS Acquisitions of Equipment (388,000) Disposals of Equipment 37,000 Cash for investments ($351,000) CASH FROM FINANCING Issue of bonds 141,000 Dividend paid (83,000) Repurchase of common stock (34,000) Cash dividend 42,400 Cash from financing $66,400 Change in cash balance $ 190,400