Pokey Corporation acquired 80 percent ownership of Stereo Company on January 1, 20X6, at underlying book value. At that date, the fair value of the noncontrolling interest was equal to 20 percent of the book value of Stereo Company. Consolidated balance sheets at January 1, 20X8, and December 31, 20X8, are as follows: (10 points)

Item	Jan 1, 20X8					Dec 31, 20X8
Cash		$	50,000					$	80,000
Accounts Receivable			75,000						90,000
Inventory			85,000						100,000
Land			60,000						80,000
Buildings and Equipment			300,000						350,000
Less: Accumulated Depreciation			(90,000	)					(120,000	)
Patents			12,000						10,000
Total Assets		$	492,000					$	590,000
Accounts Payable		$	40,000					$	58,000
Wages Payable			20,000						16,000
Notes Payable			150,000						175,000
Common Stock ($5 par value)			100,000						100,000
Retained Earnings			162,000						218,000
Noncontrolling Interest			20,000						23,000
Total Liabilities and Equities		$	492,000					$	590,000

The consolidated income statement for 20X8 contained the following amounts:

Sales				$	400,000
Cost of Goods Sold	$	172,000
Wage Expense		45,000
Depreciation Expense		30,000
Interest Expense		12,000
Amortization Expense		2,000
Other Expenses		52,000			(313,000	)
Consolidated Net Income				$	87,000
Income to Noncontrolling Interest					(6,000	)
Income to Controlling Interest				$	81,000

Pokey and Stereo paid dividends of $25,000 and $15,000, respectively, in 20X8.

Required:

1) Prepare a worksheet to develop a consolidated statement of cash flows for 20X8 using the indirect method of computing cash flows from operations. (4 points)

2) Prepare a consolidated statement of cash flows for 20X8. (6 points)