Pear Corporation acquired 75 percent ownership of Sugar Company on January 1, 20x1, at underlying book value. At that date, the fair value of the noncontrolling interest was equal to 25 percent of the book value of Sugar Company. Consolidated balance sheets at January 1, 20X3, and December 31, 20X3, are as follows: Jan. 1, 20X3 Dec. 31, 20X3 Item Assets Cash Accounts Receivable Inventory Land Buildings & Equipment Less Meeumulated Depreciation Patents Total Assets Liabilities and Owners' Equity Accounts Payable Wages Payable Notes Payable Common Stock ($10 par value) Retained Earnings Noncontrolling Interest Total Liabilities and Owners' Equity $ 68,500 82,000 115,000 45,000 515,000 (186.500) 5,000 $ 644,000 $ 100,500 97,000 123,000 55,000 550,000 (223,000) 4,000 $ 706,500 $ 61,000 26,000 250,000 150,000 130,000 27,000 $ 644,000 $ 66,000 20,000 265,000 150,000 174,500 31,000 $ 706,500 The consolidated income statement for 20x3 contained the following amounts: $ 490,000 Sales Cost of Goods Sold Wage Expense Depreciation Expense Interest Expense Amortization Expense Other Expenses Consolidated Net Income Income to Noncontrolling Interest Income to controlling Interest $259,000 55,000 36,500 16,000 1.000 39,000 (406.500) $ 83,500 (9,000) $ 74,500 Pear and Sugar paid dividends of $30,000 and $20,000, respectively, in 20X3. Required: a. Prepare a worksheet to develop a consolidated statement of cash flows for 20x3 using the indirect method of computing cash flows from operations. (Values in the first two columns (the "parent" and "subsidiary" balances) that are to be deducted should be indicated with a minus sign, while all values in the "Consolidation Entries" columns should be entered as positive values. For accounts where multiple adjusting entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of Pres PEAR CORPORATION AND SUBSIDIARY Consolidated Cash Flow Worksheet Year Ended December 31, 20X3 Consolidation Entries Balance Debit Credit 1/1/X3 Item Balance 12/31/X3 Assets Cash Accounts receivable $ 0 0 0 0 0 0 0 $ 0 0 0 0 0 0 Inventory Land Buildings and equipment Less: Accumulated depreciation Patents Total Assets Liabilities & Equity Accounts payable Wages payable Notes payable Common stock Retained earnings Noncontrolling interest Total Liabilities & Equity Cash Flows from Operating Activities: Consolidated net income Depreciation expense Amortization of patent Changes in operating assets and liabilities: Increase in accounts receivable Increase in inventory Increase in accounts payable Decrease in wages payable Cash Flows from Investing Activities: Purchase of land Purchase of buildings and equipment 0 $ 0 $ 0 $ 0 $ 0 Purchase of land Purchase of buildings and equipment Cash Flows from Financing Activities: Increase in notes payable Dividends Paid: To Pear Corporation shareholders To Sugar Company shareholders Increase in cash 0 0 b. Prepare a consolidated statement of cash flows for 20X3. (Amounts to be PEAR CORPORATION AND SUBSIDIARY Consolidated Statement of Cash Flows Year Ended December 31, 20X3 Cash Flows from Operating Activities Adjustments for noncash items: Changes in operating assets and liabilities: $ 0 Cash Flows from Investing Activities: 0 Cash Flows from Financing Activities: O o $ Cash at beginning of year Cash at end of year $ 0