4 Following are the consolidated balance sheet accounts of Primer Inc. and its subsidiary, Sore Corporation, as of December 31, 20X6 and 20X5 Assets Cash Marketable Equity Securities, at cost Allowance to Reduce Marketable Equity Securities to Market Accounts Receivable, net Inventories Land Plant and Equipment Accumulated Depreciation Goodwill, net Total Assets Liabilities and Stockholders' Equity Current Portion of Long-Term Note Accounts Payable and Accrued Liabilities Note Payable, Long-Term Deferred Tax Liability, net Minority Interest in Net Assets of Subsidiary Common Stock, par $10 Additional Paid-In Capital Retained Earnings Treasury Stock, at cost Total Liabilities and Stockholders' Equity 20X6 $ 327,000 190,000 Consolidated net incone Sore Corporation (14,000) 426,000 $237,500 116,500 612,000 402,000 764,000 (155,000) 62,000 $2,584,000 $ 150,000 582,000 292,000 44,000 159,000 572,000 290,000 495,000 0 $2,584,000 20x5 $ 209,000 190,000 (25,000) 448,000 542,000 187,000 699,000 (131,000) 65,000 $2,184,000 $ 150,000 461,000 442,000 32,000 141,000 472,000 167,000 356,000 (37,000) $2,184,000 Net Increase (Decrease) $ 118,000 0 11,000 (22,000) 70,000 215,000 65,000 $ (54,000) (3,000) $ 400,000 8 121,000 (150,000) 12,000 18,000 100,000 123,000 139,000 37,000 $ 400,000 Additional Information 1. On January 20, 20x6, Primer issued 10,000 shares of its common stock for land having a fair value of $215,000 2. On February 5, 20X6, Primer reissued all of its treasury stock for $44,000. 3. On May 15, 20X6, Primer paid a $63,000 cash dividend on its common stock. 4. On August 8, 20X6, Primer purchased equipment for $127,000 5. On September 30, 20X6, Primer sold equipment for $40,000. The equipment cost $62,000 and had a carrying amount of $34,000 on the date of sale 6. On December 15, 20X6, Sore paid a cash dividend of $55,000 on its common stock 7. Sore recognized goodwill impairment loss of $3,000 in 20x6. 8. Deferred income taxes represent temporary differences between book and tax bases of accounts receivable, marketable equity securities and plant and equipment. 9. Net income for 20X6 was as follows: 10 Primer owns 70 percent of its subsidiary, Sore No change in the ownership interest in Sore occurred during 20X5 and 20x6 No intercompany transactions occurred other than the dividend paid to Primer Inc. by its subsidiary The ces 10. Primer owns 70 percent of its subsidiary. Sore. No change in the ownership interest in Sore occurred during 20X5 and 20X6. No intercompany transactions occurred other than the dividend paid to Primer Inc. by its subsidiary. Required: Prepare a consolidated statement of cash flows for Primer Inc. and its subsidiary for the year ended December 31, 20X6, using the indirect method. (Amounts to be deducted should be indicated with a minus sign.) Cash Flows from Operating Activities: Adjustments for noncash items PRIMER INC. AND SUBSIDIARY Consolidated Statement of Cash Flows For the Year Ended December 31, 20X6 Changes in operating assets and liabilities: Total Adjustments Cash Flows from Investing Activities. Cash Flows from Financing Activibes $ 0 0 0 Supplemental Schedule of Noncash Investing and Financing Activities: Issuance of common stock to purchase land