Bolero Company holds 75 percent of the common stock of Rivera, Inc., and 40 percent...
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Accounting
Bolero Company holds 75 percent of the common stock of Rivera, Inc., and 40 percent of this subsidiarys convertible bonds. The following consolidated financial statements are for 2017 and 2018:
2017 | 2018 | ||||||
Revenues | $ | (945,000 | ) | $ | (1,075,000 | ) | |
Cost of goods sold | 619,000 | 659,000 | |||||
Depreciation and amortization | 109,000 | 138,000 | |||||
Gain on sale of building | 0 | (39,000 | ) | ||||
Interest expense | 49,000 | 49,000 | |||||
Consolidated net income | (168,000 | ) | (268,000 | ) | |||
to noncontrolling interest | 28,000 | 30,000 | |||||
to parent company | $ | (140,000 | ) | $ | (238,000 | ) | |
Retained earnings, 1/1 | $ | (319,000 | ) | $ | (390,000 | ) | |
Net income | (140,000 | ) | (238,000 | ) | |||
Dividends declared | 69,000 | 119,000 | |||||
Retained earnings, 12/31 | $ | (390,000 | ) | $ | (509,000 | ) | |
Cash | $ | 99,000 | $ | 198,000 | |||
Accounts receivable | 188,000 | 159,000 | |||||
Inventory | 219,000 | 378,000 | |||||
Buildings and equipment (net) | 659,000 | 737,000 | |||||
Databases | 188,000 | 164,000 | |||||
Total assets | $ | 1,353,000 | $ | 1,636,000 | |||
Accounts payable | $ | (161,000 | ) | $ | (128,000 | ) | |
Bonds payable | (419,000 | ) | (538,000 | ) | |||
Noncontrolling interest in Rivera | (51,000 | ) | (70,000 | ) | |||
Common stock | (136,000 | ) | (149,000 | ) | |||
Additional paid-in capital | (196,000 | ) | (242,000 | ) | |||
Retained earnings | (390,000 | ) | (509,000 | ) | |||
Total liabilities and equities | $ | (1,353,000 | ) | $ | (1,636,000 | ) | |
Additional Information for 2018
The parent issued bonds during the year for cash.
Amortization of databases amounts to $24,000 per year.
The parent sold a building with a cost of $98,000 but a $49,000 book value for cash on May 11.
The subsidiary purchased equipment on July 23 for $241,000 in cash.
Late in November, the parent issued stock for cash.
During the year, the subsidiary paid dividends of $44,000. Both parent and subsidiary pay dividends in the same year as declared.
Prepare a consolidated statement of cash flows for this business combination for the year ending December 31, 2018. (Use indirect method)
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