On June 30, 2018, Plaster, Inc., paid $988,000 for 80 percent of Stucco Company's outstanding stock. Plaster assessed the acquisition-date fair value of the 20 percent noncontrolling interest at $247,000. At acquisition date, Stucco reported the following book values for its assets and liabilities:
Cash | $ | 64,500 | |
Accounts receivable | 136,900 | ||
Inventory | 219,200 | ||
Land | 70,400 | ||
Buildings | 189,400 | ||
Equipment | 324,300 | ||
Accounts payable | (37,700 | ) | |
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) | $ | 80,400 |
Database (10-year remaining life) | 187,600 | |
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 | $ | 45,700 | $ | 258,100 | ||||
Accounts receivable (net) | 384,500 | 515,900 | ||||||
Inventory | 441,100 | 764,900 | ||||||
Land | 318,900 | 389,300 | ||||||
Buildings (net) | 260,300 | 394,300 | ||||||
Equipment (net) | 1,912,500 | 2,171,600 | ||||||
Database | 0 | 178,220 | ||||||
Total assets | $ | 3,363,000 | $ | 4,672,320 | ||||
Accounts payable | $ | 85,400 | $ | 114,200 | ||||
Long-term liabilities | 427,000 | 1,351,540 | ||||||
Common stock | 1,921,500 | 1,921,500 | ||||||
Noncontrolling interest | 0 | 272,600 | ||||||
Retained earnings | 929,100 | 1,012,480 | ||||||
Total liabilities and equities | $ | 3,363,000 | $ | 4,672,320 | ||||
PLASTER, INC., AND SUBSIDIARY STUCCO COMPANY Consolidated Income Statement For the Year Ended December 31, 2018 |
|||||||||
Revenues | $ | 1,296,600 | |||||||
Cost of goods sold | $ | 785,200 | |||||||
Depreciation | 199,200 | ||||||||
Database amortization | 9,380 | ||||||||
Interest and other expenses | 10,600 | 1,004,380 | |||||||
Consolidated net income | $ | 292,220 | |||||||
Additional Information for 2018
On December 1, Stucco paid a $47,200 dividend. During the year, Plaster paid $172,000 in dividends.
During the year, Plaster issued $924,540 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.
|
Get Answers For Free
Most questions answered within 1 hours.