Using the data presented in P10–22,

Required

Prepare a worksheet to develop a consolidated statement of cash flows using the direct method for computing cash flows from operations.

Data from Exercises 22

Sun Corporation was created on January 1, 20X2, and quickly became successful. On January 1, 20X6, its owner sold 80 percent of the stock to Planet Company at underlying book value. At the date of that sale, the fair value of the remaining shares was equal to 20 percent of the book value of Sun. Planet continued to operate the subsidiary as a separate legal entity and used the equity method in accounting for its investment in Sun. The following consolidated financial statements have been prepared:

During 20X6, Sun reported net income of $60,000 and paid dividends of $20,000; Planet reported net income of $148,000 and paid dividends of $65,000. There were no intercompany transfers during the period.

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PLANET COMPANY AND SUBSIDIARY Consolidated Balance Sheets January 1, 20X6 $ 54,000 121,000 230,000 95,000 800,000 (290,000) Cash Accounts Receivable Inventory Land Buildings & Equipment Less: Accumulated Depreciation December 31, 20X6 $ 75,000 111,000 360,000 100,000 650,000 (230,000)