Answered step by step
Verified Expert Solution
Link Copied!

Question

...
1 Approved Answer

On January 1, 2018, Beilich Enterprises bought 20% of the outstanding common stock of Wolfe Construction Company for $680.0 million cash. Wolfes net income for

On January 1, 2018, Beilich Enterprises bought 20% of the outstanding common stock of Wolfe Construction Company for $680.0 million cash. Wolfes net income for the year ended December 31, 2018, was $340.0 million. During 2018, Wolfe declared and paid cash dividends of $68.0 million. Beilich recorded the investment as follows:

($ in millions)
Purchase
Investment in Wolfe Construction shares 680.0
Cash 680.0
Net income
Investment in Wolfe Construction shares (20% $340.0 million) 68.0
Investment revenue 68.0
Dividends
Cash (20% $68.0 million) 13.6
Investment in Wolfe Construction shares. 13.6

Required: What would be the pretax amounts related to the investment that Beilich would report in its statement of cash flows for the year ended December 31, 2018? (Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5). Cash outflows should be indicated by a minus sign.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started