In its consolidated cash flow statement for the year ended December 31, Year 2, Gonzalez Corporation reported

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In its consolidated cash flow statement for the year ended December 31, Year 2, Gonzalez Corporation reported operating cash inflows of $568,000, financing cash outflows of $460,000, investing cash outflows of $160,000, and an ending cash balance of $114,000. Gonzalez purchased 70 percent of Montebello Company’s common shares on March 12, Year 1, at book value. Montebello reported net income of $60,000, paid dividends of $20,000 in Year 2, and is included in Gonzalez’s consolidated statements. Gonzalez paid dividends of $90,000 in Year 2. The indirect method is used in computing cash flow from operations. 


Required 

(a) What was the cash balance at January 1, Year 2 on the consolidated cash flow statement? 

(b) What amount was reported as dividends paid in the cash flow from financing activities section of the consolidated cash flow statement? 

(c) If the other adjustments to reconcile consolidated net income and cash provided by operations resulted in a $154,000 increase over net income, what amount was reported as consolidated net income for Year 2?

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Modern Advanced Accounting In Canada

ISBN: 9781260881295

10th Edition

Authors: Hilton Murray, Herauf Darrell

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