PROBLEM 418 Consolidated Statement of Cash Flows, Indirect Method A consolidated income statement for 2011 and comparative consolidated balance sheets for 2010 and 2011 for P Company and its 80% owned subsidiary follow. P COMPANY AND SUBSIDIARY Consolidated Income Statement for the Year Ended December 31, 2011 $1,900,000 Sales Cost of goods sold Gross margin Expenses Operating income before tax Dividend income Income before tax Income taxes Consolidated net income Less: Noncontrolling interest in consolidated net income Controlling interest in consolidated net income 1,000,000 900,000 600,000 50,000 220,000 66,000 330,000 30.00 P COMPANY Consolidated Balance Sheets December 31. 2010 and 2011 2011 Assets Cash Accounts receivable Inventories Equipment (net) Long-term investments Goodwil $300,000 250,000 190,000 500,000 800,000 75,000 45,000 2.215,000 $ 250,000 360,000 210,000 950,000 800,000 175,000 Total assets P COMPANY Consolidated Balance Sheets December 31. 2010 and 2011 Liabilities and Eguity 2011 2010 Accounts payable Accrued payable Bonds payable Premium on bonds payable Noncontrolling interest 268,000 500,000 260,000 200,000 40,000 148,000 600,000 225,000 200,000 90,000 450,000 225,000 stock, $1 par value Other contributed capital Retained earnings Total equities E2245,000 2.213.00