(Issue 1 with a noncontrolling interest). P Company acquired 80% of the common stock of the S Company for an agreed-upon price of $640,000. The book value of the net assets is

$600,000, which includes $50,000 of subsidiary cash equivalents. How will this transaction affect the cash flow statement of the consolidated firm in the period of the purchase, if:

a. P Company pays $640,000 cash to purchase the stock?

b. P Company pays $400,000 cash and signs 5-year notes for $240,000? 80% of the Company S shareholders receive notes.

c. P Company exchanges only common stock with the 80% of the shareholders of Company S?

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