Following are the consolidated balance sheet accounts of Primer Inc. and its subsidiary, Sore Corporation, as of December 31, 20X6 and 20X5.

Additional Information

1. On January 20, 20X6, Primer issued 10,000 shares of its common stock for land having a fair value of $215,000.

2. On February 5, 20X6, Primer reissued all of its treasury stock for $44,000.

3. On May 15, 20X6, Primer paid a $58,000 cash dividend on its common stock.

4. On August 8, 20X6, Primer purchased equipment for $127,000.

5. On September 30, 20X6, Primer sold equipment for $40,000. The equipment cost $62,000 and had a carrying amount of $34,000 on the date of sale.

6. On December 15, 20X6, Sore paid a cash dividend of $50,000 on its common stock.

7. Sore recognized goodwill impairment loss of $3,000 in 20X6.

8. Deferred income taxes represent temporary differences between book and tax bases of accounts receivable, marketable equity securities, and plant and equipment.

9. Net income for 20X6 was as follows:

10. Primer owns 70 percent of its subsidiary, Sore. No change in the ownership interest in Sore occurred during 20X5 and 20X6. No intercompany transactions occurred other than the dividend paid to Primer Inc. by its subsidiary.

Required 

Prepare a consolidated statement of cash flows for Primer Inc. and its subsidiary for the year ended December 31, 20X6, using the indirect method.

Transcribed Image Text:

Assets Cash Marketable Equity Securities, at cost Allowance to Reduce Marketable Equity Securities to Market Accounts Receivable, net Inventories Land Plant & Equipment Accumulated Depreciation Goodwill, net Total Assets Liabilities & Stockholders' Equity Current Portion of Long-Term Note Accounts Payable and Accrued Liabilities Note Payable, Long-Term Deferred Tax Liability, net Minority Interest in Net Assets of Subsidiary Common Stock, par $10 Additional Paid-In Capital Retained Earnings Treasury Stock, at cost Total Liabilities & Stockholders' Equity 20X6 $ 313,000 175,000 (13,000) 418,000 595,000 385,000 755,000 (199,000) 57,000 $2,486,000 $ 150,000 595,000 300,000 44,000 179,000 580,000 303,000 335,000 $2,486,000 20X5 $ 195,000 175,000 (24,000) 440,000 525,000 170,000 690,000 (145,000) 60,000 $2,086,000 $ 150,000 474,000 450,000 32,000 161,000 480,000 180,000 195,000 (36,000) $2,086,000 Net Increase (Decrease) $118,000 0 11,000 (22,000) 70,000 215,000 65,000 (54,000) (3.000) $400,000 $ 121,000 (150,000) 12,000 18,000 100,000 123,000 140,000 36,000 $400,000