On January 1, 2011, Hamilton sold $1,100,000 in 10-year bonds to the public at 110. The bonds had a cash interest rate of 10 percent payable every December 31. Cairns acquired 45 percent of these bonds at 92 percent of face value on January 1, 2013. Both companies utilize the straight-line method of amortization. Prepare entry B for DEC 31-2013-2014and 2015 2- Albuquerque, Inc., acquired 18,000 shares of Marmon Company several years ago for $710,000. At the acquisition date, Marmon reported a book value of $700,000, and Albuquerque assessed the fair value of the noncontrolling interest at $60,000. Any excess of acquisition-date fair value over book value was assigned to broadcast licenses with indefinite lives. Since the acquisition date and until this point, Marmon has issued no additional shares. No impairment has been recognized for the broadcast licenses. | At the present time, Marmon reports $850,000 as total stockholders equity, which is broken down as follows: 3- Problem 6-45 (LO 6-4) Bolero Company holds 80 percent of the common stock of Rivera, Inc., and 30 percent of this subsidiarys convertible bonds. The following consolidated financial statements are for 2014 and 2015: | Bolero Company and Consolidated Subsidiary Rivera | | 2014 | 2015 | Revenues | | $ | (930,000) | | | $ | (1,060,000) | | Cost of goods sold | | | 616,000 | | | | 656,000 | | Depreciation and amortization | | | 106,000 | | | | 132,000 | | Gain on sale of building | | | 0 | | | | (36,000) | | Interest expense | | | 46,000 | | | | 46,000 | | | | | | | Consolidated net income | | | (162,000) | | | | (262,000) | | to noncontrolling interest | | | 25,000 | | | | 27,000 | | | | | | | to parent company | | $ | (137,000) | | | $ | (235,000) | | | | | | | Retained earnings, 1/1 | | $ | (316,000) | | | $ | (387,000) | | Net income | | | (137,000) | | | | (235,000) | | Dividends declared | | | 66,000 | | | | 116,000 | | | | | | | Retained earnings, 12/31 | | $ | (387,000) | | | $ | (506,000) | | | | | | | Cash | | $ | 96,000 | | | $ | 192,000 | | Accounts receivable | | | 182,000 | | | | 156,000 | | Inventory | | | 216,000 | | | | 372,000 | | Buildings and equipment (net) | | | 656,000 | | | | 722,000 | | Databases | | | 182,000 | | | | 161,000 | | | | | | | Total assets | | $ | 1,332,000 | | | $ | 1,603,000 | | | | | | | Accounts payable | | $ | (172,000) | | | $ | (116,000) | | Bonds payable | | | (416,000) | | | | (532,000) | | Noncontrolling interest in Rivera | | | (48,000) | | | | (67,000) | | Common stock | | | (116,000) | | | | (146,000) | | Additional paid-in capital | | | (193,000) | | | | (236,000) | | Retained earnings | | | (387,000) | | | | (506,000) | | | | | | | Total liabilities and equities | | $ | (1,332,000) | | | $ | (1,603,000) | | | | | | | Additional Information for 2015 | | The parent issued bonds during the year for cash. | | Amortization of databases amounts to $21,000 per year. | | The parent sold a building with a cost of $92,000 but a $46,000 book value for cash on May 11. | | The subsidiary purchased equipment on July 23 for $239,000 in cash. | | Late in November, the parent issued stock for cash. | | During the year, the subsidiary paid dividends of $10,000. Both parent and subsidiary pay dividends in the same year as declared. | Prepare a consolidated statement of cash flows for this business combination for the year ending December 31, 2015. (Use indirect method) | | | Common stock ($12 par value) | $ | 240,000 | Additional paid-in capital | | 340,000 | Retained earnings | | 270,000 | | | | Total | $ | 850,000 | | | | | |