Question

On June 30, 2021, Plaster, Inc., paid $980,000 for 80 percent of Stucco Company's outstanding stock....

On June 30, 2021, Plaster, Inc., paid $980,000 for 80 percent of Stucco Company's outstanding stock. Plaster assessed the acquisition-date fair value of the 20 percent noncontrolling interest at $245,000. At acquisition date, Stucco reported the following book values for its assets and liabilities:

Cash $ 64,000
Accounts receivable 135,800
Inventory 217,400
Land 69,800
Buildings 187,800
Equipment 321,600
Accounts payable (37,400 )

(Parentheses indicate credit balances.)

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) $ 79,800
Database (10-year remaining life) 186,200

At the end of 2021, the following comparative (2020 and 2021) balance sheets and consolidated income statement were available:

Plaster, Inc.
December 31, 2020		 Consolidated
December 31, 2021
Cash $ 45,400 $ 256,400
Accounts receivable (net) 382,000 512,500
Inventory 438,200 759,900
Land 316,800 386,600
Buildings (net) 258,600 396,400
Equipment (net) 1,900,000 2,153,500
Database 0 176,890
Total assets $ 3,341,000 $ 4,642,190
Accounts payable $ 84,800 $ 113,400
Long-term liabilities 424,000 1,334,680
Common stock 1,908,000 1,908,000
Noncontrolling interest 0 270,700
Retained earnings 924,200 1,015,410
Total liabilities and equities $ 3,341,000 $ 4,642,190
PLASTER, INC., AND SUBSIDIARY STUCCO COMPANY
Consolidated Income Statement
For the Year Ended December 31, 2021
Revenues $ 1,287,800
Cost of goods sold $ 779,900
Depreciation 197,900
Database amortization 9,310
Interest and other expenses 10,500 997,610
Consolidated net income $ 290,190


Additional Information for 2021

  • On December 1, Stucco paid a $46,400 dividend. During the year, Plaster paid $164,000 in dividends.
  • During the year, Plaster issued $910,680 in long-term debt at par.
  • Plaster reported no asset purchases or dispositions other than the acquisition of Stucco.

Prepare a 2021 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.)

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