Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

On June 30, 2021, Plaster, Inc., paid $868,000 for 80 percent of Stucco Company's outstanding stock. Plaster assessed the acquisition-date fair value of the 20

On June 30, 2021, Plaster, Inc., paid $868,000 for 80 percent of Stucco Company's outstanding stock. Plaster assessed the acquisition-date fair value of the 20 percent noncontrolling interest at $217,000. At acquisition date, Stucco reported the following book values for its assets and liabilities:

Cash $ 56,800
Accounts receivable 120,400
Inventory 192,600
Land 61,800
Buildings 166,300
Equipment 284,900
Accounts payable (33,200 )

(Parentheses indicate credit balances.)

On June 30, Plaster allocated the excess acquisition-date fair value over book value to Stucco's assets as follows:

Equipment (3-year remaining life) $ 71,000
Database (10-year remaining life) 164,400

At the end of 2021, the following comparative (2020 and 2021) balance sheets and consolidated income statement were available:

Plaster, Inc. December 31, 2020 Consolidated December 31, 2021
Cash $ 40,200 $ 227,000
Accounts receivable (net) 338,300 453,700
Inventory 388,000 672,800
Land 280,500 342,300
Buildings (net) 229,000 345,300
Equipment (net) 1,682,500 1,913,000
Database 0 156,180
Total assets $ 2,958,500 $ 4,110,280
Accounts payable $ 75,000 $ 100,300
Long-term liabilities 375,000 1,089,620
Common stock 1,687,500 1,687,500
Noncontrolling interest 0 239,500
Retained earnings 821,000 993,360
Total liabilities and equities $ 2,958,500 $ 4,110,280

PLASTER, INC., AND SUBSIDIARY STUCCO COMPANY Consolidated Income Statement For the Year Ended December 31, 2021
Revenues $ 1,140,200
Cost of goods sold $ 690,600
Depreciation 175,400
Database amortization 8,220
Interest and other expenses 9,200 883,420
Consolidated net income $ 256,780

Additional Information for 2021

  • On December 1, Stucco paid a $49,600 dividend. During the year, Plaster paid $52,000 in dividends.
  • During the year, Plaster issued $714,620 in long-term debt at par.
  • Plaster reported no asset purchases or dispositions other than the acquisition of Stucco.

Prepare a 2021 consolidated statement of cash flows for Plaster and Stucco. Use the indirect method of reporting cash flows from operating activities. (Negative amounts and amounts to be deducted should be indicated by a minus sign.)

Cash $ 56,800
Accounts receivable 120,400
Inventory 192,600
Land 61,800
Buildings 166,300
Equipment 284,900
Accounts payable (33,200 )

(Parentheses indicate credit balances.)

On June 30, Plaster allocated the excess acquisition-date fair value over book value to Stucco's assets as follows:

Equipment (3-year remaining life) $ 71,000
Database (10-year remaining life) 164,400

At the end of 2021, the following comparative (2020 and 2021) balance sheets and consolidated income statement were available:

Plaster, Inc. December 31, 2020 Consolidated December 31, 2021
Cash $ 40,200 $ 227,000
Accounts receivable (net) 338,300 453,700
Inventory 388,000 672,800
Land 280,500 342,300
Buildings (net) 229,000 345,300
Equipment (net) 1,682,500 1,913,000
Database 0 156,180
Total assets $ 2,958,500 $ 4,110,280
Accounts payable $ 75,000 $ 100,300
Long-term liabilities 375,000 1,089,620
Common stock 1,687,500 1,687,500
Noncontrolling interest 0 239,500
Retained earnings 821,000 993,360
Total liabilities and equities $ 2,958,500 $ 4,110,280

PLASTER, INC., AND SUBSIDIARY STUCCO COMPANY Consolidated Income Statement For the Year Ended December 31, 2021
Revenues $ 1,140,200
Cost of goods sold $ 690,600
Depreciation 175,400
Database amortization 8,220
Interest and other expenses 9,200 883,420
Consolidated net income $ 256,780

Additional Information for 2021

  • On December 1, Stucco paid a $49,600 dividend. During the year, Plaster paid $52,000 in dividends.
  • During the year, Plaster issued $714,620 in long-term debt at par.
  • Plaster reported no asset purchases or dispositions other than the acquisition of Stucco.

Prepare a 2021 consolidated statement of cash flows for Plaster and Stucco. Use the indirect method of reporting cash flows from operating activities. (Negative amounts and amounts to be deducted should be indicated by a minus sign.)

Consolidated Statement of Cash Flows

For the Year Ended December 31, 2021

Cash flows from operating activities: Cash Flows from Investing Activities: Cash Flows from Financing Activities: Beginning Cash, 1/1/21 Ending Cash, 12/31/21

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored 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

Recommended Textbook for

The Security Risk Handbook Assess Survey Audit

Authors: Charles Swanson

1st Edition

1032030356, 978-1032030357

More Books

Students also viewed these Accounting questions

Question

can you made ERD for Postal messages company

Answered: 1 week ago