The following 20X2 consolidated statement of cash flows is presented for Acme Printing Company and its subsidiary, Jones Delivery:

Acme Printing Company purchased 60 percent of the voting shares of Jones Delivery in 20X1 for \(\$ 40,000\) above book value.
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a. Determine the net income of Jones Delivery for \(20 \mathrm{X} 2\).

b. Determine the amount of dividends paid by Jones Delivery in \(20 \mathrm{X} 2\).

c. Explain why the amortization of bond premium is treated as a deduction from net income in arriving at net cash flow from operating activities.

d. Explain why an increase in accounts receivable is treated as a deduction from net income in arriving at net cash flows from operating activities.

e. Explain why dividends to noncontrolling stockholders are not shown as a dividend payment in the retained earnings statement but are shown as a distribution of cash in the consolidated cash flow statement.

f. Did the loss on the sale of equipment included in the consolidated statement of cash flows result from a sale to an affiliate or a nonaffiliate? How do you know?

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Acme Printing Company and Subsidiary Consolidated Statement of Cash Flows For the Year Ended December 31, 20X2 Cash Flows from Operating Activities: Consolidated Net Income Noncash Items Included in Income: Depreciation Expense Amortization of Patents $120,000 45.000 1,000 Amortization of Bond Premium Income to Noncontrolling Interest Loss on Sale of Equipment Decrease in Inventory Increase in Accounts Receivable Net Cash Provided by Operating Activities Cash Flows from Investing Activities: Purchase of Buildings Sale of Equipment Net Cash Used in Investing Activities (2.000) 10.000 23.000 20.000 (12.000) $205.000 $(150.000) 60.000 (90.000)