Pepitone Company acquires an 80% interest in Spahn Company for $400,000 cash on January 1, 2018. On that date, Spahns equipment (remaining economic life of 5 years) is undervalued by $50,000; any remaining excess of cost over book value is attributed to goodwill. Spahns balance sheet on the date of the purchase is as follows:

Assets		Liabilities and Equity
Cash	$ 60,000	Current liabilities	$ 60,000
Inventory	60,000	Long-term liabilities	80,000
Property, plant and equip.	600,000	Common Stock (no par)	300,000
Accumulated depreciation	(180,000)	Retained Earnings	100,000
Total assets	$540,000	Total Liabilities & Equity	$540,000

The controlling interest in consolidated net income for 2018 is $195,800; the noncontrolling interest is $12,000. On December 31, 2018, Pepitone acquired a 15% interest in Adams, Inc. and, in an unrelated transaction, issued additional common stock. Dividends declared and paid during the year by Pepitone and Spahn were $60,000 and $30,000, respectively. There are no purchases or sales of property, plant, or equipment during the year.

	Pepitone 1/1/18	Consolidated 12/31/18
Cash	200,000	174,200
Inventory	100,000	168,600
Property, plant and equipment Accumulated depreciation	2,000,000 (800,000)	2,650,000 (1,106,000)
Investment in Adams		115,000
Goodwill		50,000
Current Liabilities	(160,000)	(230,000)
Long-term Liabilities	(200,000)	(260,000)
NCI		(106,000)
Common Stock ($10 par)	(200,000)	(240,000)
Paid-In Capital in Excess of Par Retained Earnings	(600,000) (340,000) -0-	(740,000) (475,800) -0-

Prepare the following:

Please prepare a consolidated statement of cash flows and the noncash schedule of investing activity for the year ended December 31, 2018, for Pepitone and its subsidiary. Prepare the formal Statement of Cash Flows for Pepitone on the next page. Prepare the noncash schedule of investing activity on a separate page following the Statement of Cash Flows.