Traper Company holds 80 percent ownership of Arrow Company. The consolidated balance sheets as of December 31, 20X3, and December 31, 20X4, are as follows:

The 20X4 consolidated income statement contained the following amounts:

Traper purchased its investment in Arrow on January 1, 20X2, for \(\$ 190,000\). At that time, Arrow reported net assets of \(\$ 150,000\). A total of \(\$ 40,000\) of the purchase differential was assigned to goodwill. The remainder of the differential was assigned to equipment with a remaining life of 20 years from the date of combination.
Traper Company sold \(\$ 100,000\) of bonds on December \(31,20 \mathrm{X} 4\), to assist in generating additional funds. Arrow reported net income of \(\$ 35,000\) for \(20 \mathrm{X} 4\) and paid dividends of \(\$ 15,000\). Traper reported 20X4 equity-method net income of \(\$ 80,000\) and paid dividends of \(\$ 25,000\).
\section*{Required}

a. Prepare a workpaper to develop a consolidated statement of cash flows for \(20 \mathrm{X} 4\).

b. Prepare a consolidated statement of cash flows for \(20 \mathrm{X} 4\).

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Cash Accounts Receivable Inventory Land Dec. 31, 20X3 $ 83.000 210,000 Dec. 31, 20X4 $ 181,000 175,000 320,000 370,000 190.000 160,000 Buildings and Equipment 850.000 980.000 Less: Accumulated Depreciation (280,000) (325,000) Goodwill 40.000 28.000 Total Assets $1,413,000 $1,569,000