Detecto Corporation purchased 60 percent of the outstanding shares of Strand Company on January \(1,20 \mathrm{X} 1\), for \(\$ 24,000\) more than book value. The full amount of the excess payment is considered related to patents and is being amortized over an eight-year period. In 20X1, Strand Company purchased a piece of land for \(\$ 35.000\) and later in the year sold it to Detecto Corporation for \(\$ 45,000\). Detecto Corporation is still holding the land as an investment. During 20X3, Detecto bonds with a value of \(\$ 100,000\) were exchanged for equipment valued at \(\$ 100,000\).

On January 1, 20X3. Detecto Corporation held inventory purchased previously from Strand Company for \(\$ 48,000\). During 20X3, Detecto Corporation purchased an additional \(\$ 90,000\) of goods from Strand Company and held \(\$ 54,000\) of this inventory on December 31, 20X3. Strand Company sells merchandise to the parent at cost plus a 20 percent markup.

Strand Company also purchases inventory items from Detecto Corporation. On January 1, 20X3. Strand Company held inventory it previously purchased from Detecto Corporation for \(\$ 14.000\), and on December 31, 20X3 , it held goods it purchased from Detecto for \(\$ 7,000\) during 20X3. Strand's total purchases from Detecto Corporation in \(20 \times 3\) were \(\$ 22,000\). Detecto Corporation sells inventory to Strand Company at cost plus a 40 percent markup.

The consolidated balance sheet at December 31, 20X2, contained the following amounts:

The consolidation workpaper on page 575 was prepared on December 31, 20X3. All eliminating entries and adjustments have been entered properly in the workpaper. Detecto Corporation accounts for its investment in Strand Company using the basic equity method.
\section*{Required}

a. Prepare a workpaper for a consolidated statement of cash flows for 20X3 .

b. Prepare a consolidated statement of cash flows for \(20 \times 3\).

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Cash Accounts Receivable Inventory Land Buildings and Equipment Patents Accumulated Depreciation Accounts Payable Bonds Payable Noncontrolling Interest Common Stock Retained Earnings Totals Debit Credit $ 92,000 135.000 140,000 75.000 400,000 18.000 $210,000 114.200 90.000 72,800 100,000 273,000 $860,000 $860,000