Cash Flow Statement, Year of Acquisition Badco Inc. purchased a 90% interest in Lazytoo Company for $600,000 cash on January 1, 2004. Any excess of cost over book value was attributed to depreciable assets with a 15-year remaining life (straight-line depreciation). To help pay for the acquisition, Badco issued $300,000, 20-year, 12% bonds at par value. Lazytoo’s balance sheet on the date of acquisition was as follows: LO6 Assets Liabilities and Equity Cash $ 10,000 Accrued Payables $ 90,000 Inventory 140,000 Bonds Payable 100,000 Fixed Assets (net) 540,000 Common Stock ($10 par) 200,000 “ Retained Earnings 300,000 Total Assets $690,000 Total Liabilities and Equity $690,000 Consolidated net income for 2004 was $149,000, net of the noncontrolling interest of $8,000. Badco declared and paid dividends of $10,000 and Lazytoo declared and paid dividends of $5,000. There were no purchases or sales of property, plant, and equipment during the year.
At the end of 2004, the following information was also available:
Badco Company 12/31/03 Consolidated 12/31/04 Debits Credits Debits Credits ee Ee eek Sree anew See COMURE TOE Aes tS uh” 9 eOuEIyY Pee ERGY Wave ni rt wet ee eee Cash $ 390,000 $ 63,500 Inventory 190,000 454,000 Fixed Assets 750,000 1,370,000 Accrued Payables 150,000 111,000 Bonds Payable 200,000 600,000 Noncontrolling Interest 57,500 Common Stock ($10 par) 200,000 200,000 Additional Paid-in-Capital 550,000 550,000 Retained Earnings 230,000 369,000 Total $1,330,000 $1,330,000 $1,887,500 $1,887,500 Required:
Prepare a consolidated statement of cash flows using the indirect method for Badco and its subsidiary for the year ended December 31, 2004.