Alford Company and its 80 percentowned subsidiary, Knight, have the following income statements for 2024: Additional Information

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Alford Company and its 80 percent–owned subsidiary, Knight, have the following income statements for 2024:image



Additional Information for 2024


∙ Intra-entity inventory transfers during the year amounted to $90,000. All intra-entity transfers were downstream from Alford to Knight.


∙ Intra-entity gross profits in inventory at January 1 were $6,000, but at December 31 they are $9,000.


∙ Annual excess amortization expense resulting from the acquisition is $11,000.


∙ Knight paid dividends totaling $20,000.


∙ The noncontrolling interest’s share of the subsidiary’s income is $9,800.


∙ During the year, consolidated inventory rose by $11,000 while accounts receivable and accounts payable declined by $8,000 and $6,000, respectively. 


Using either the direct or indirect method, compute net cash flows from operating activities during the period for the business combination.

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Advanced Accounting

ISBN: 9781264798483

15th Edition

Authors: Joe Ben Hoyle, Thomas Schaefer And Timothy Doupnik

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