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Cash Accounts receivable Inventory Land Buildings Equipment Accounts payable $ 60,000 127,000 203,000 65,000 175,000 300,000 (35,000) On June 30, 2018, Lucy, Inc. paid $916,000

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Cash Accounts receivable Inventory Land Buildings Equipment Accounts payable $ 60,000 127,000 203,000 65,000 175,000 300,000 (35,000) On June 30, 2018, Lucy, Inc. paid $916,000 for 80 percent of Ethel Company's outstanding stock. Lucy assessed the acquisition-date fair value of the 20 percent noncontrolling interest at $229,000. At acquisition date, Ethel reported the following book values for its assets and liabilities: On June 30, Lucy allocated the excess acquisition-date fair value over book value to Ethel's assets as follows: Equipment (3-year rema $ 75,000 Database (10-year rema 175,000 At the end of 2018, the following comparative (2017 and 2018) balance sheets and consolidated income statement were available: Lucy, Inc. Consolidated 12/31/17 12/31/18 Cash $ 43,000 242,850 Accounts receivable (net) 362,000 485,400 Inventory 415,000 720,000 Land 300,000 365,000 Buildings (net) 245,000 370,000 Equipment (net) 1,800,000 2,037,500 Database 166,250 Total assets $ 3,165,000 $ 4,387,000 $ 80,000 400,000 1,800,000 Accounts payable Long-term liabilities Common stock Noncontrolling interest Retained earnings Total liabilities and equities 107,000 1,200,000 1,800,000 255,500 1,024,500 4,387,000 885,000 3,165,000 $ $ $ 1,217,500 LUCY, INC., & SUBSIDIARY ETHEL CO. Consolidated Income Statement For the Year Ended December 31, 2018 Revenues Cost of goods sold 737,500 Depreciation 187,500 Database amortization 8,750 Interest and other expenses 9,750 Consolidated net income Additionally, on December 1, 2018, Ethel paid a $40,000 dividend. During the year, Lucy paid $100,000 in dividends. During 2018, Lucy issued $800,000 in long-term debt at par and reported no asset purchases or dispositions other than the acquisition of Ethel. Prepare a 2018 consolidated statement of cash flows for Lucy and Ethel using either the direct method for the 943,500 274,000 $ Cash Accounts receivable Inventory Land Buildings Equipment Accounts payable $ 60,000 127,000 203,000 65,000 175,000 300,000 (35,000) On June 30, 2018, Lucy, Inc. paid $916,000 for 80 percent of Ethel Company's outstanding stock. Lucy assessed the acquisition-date fair value of the 20 percent noncontrolling interest at $229,000. At acquisition date, Ethel reported the following book values for its assets and liabilities: On June 30, Lucy allocated the excess acquisition-date fair value over book value to Ethel's assets as follows: Equipment (3-year rema $ 75,000 Database (10-year rema 175,000 At the end of 2018, the following comparative (2017 and 2018) balance sheets and consolidated income statement were available: Lucy, Inc. Consolidated 12/31/17 12/31/18 Cash $ 43,000 242,850 Accounts receivable (net) 362,000 485,400 Inventory 415,000 720,000 Land 300,000 365,000 Buildings (net) 245,000 370,000 Equipment (net) 1,800,000 2,037,500 Database 166,250 Total assets $ 3,165,000 $ 4,387,000 $ 80,000 400,000 1,800,000 Accounts payable Long-term liabilities Common stock Noncontrolling interest Retained earnings Total liabilities and equities 107,000 1,200,000 1,800,000 255,500 1,024,500 4,387,000 885,000 3,165,000 $ $ $ 1,217,500 LUCY, INC., & SUBSIDIARY ETHEL CO. Consolidated Income Statement For the Year Ended December 31, 2018 Revenues Cost of goods sold 737,500 Depreciation 187,500 Database amortization 8,750 Interest and other expenses 9,750 Consolidated net income Additionally, on December 1, 2018, Ethel paid a $40,000 dividend. During the year, Lucy paid $100,000 in dividends. During 2018, Lucy issued $800,000 in long-term debt at par and reported no asset purchases or dispositions other than the acquisition of Ethel. Prepare a 2018 consolidated statement of cash flows for Lucy and Ethel using either the direct method for the 943,500 274,000 $

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