Question
Q5 The abbreviated consolidated financial statements of Print Inc. and its subsidiary, Set Inc., for the two years ended December 31, Year 5 and Year
Q5 The abbreviated consolidated financial statements of Print Inc. and its subsidiary, Set Inc., for the two years ended December 31, Year 5 and Year 6, are presented below.
Additional Information
Set is a 75-percent-owned subsidiary of Print.
Print owns a 25 percent interest in Run that is accounted for using the equity method.
During Year 6, Set declared and paid $200,000 in dividends and Run declared and paid $40,000 in dividends.
Depreciation of $440,000 is included in the cost of goods sold and research and development expenses.
The questions are based on the preparation of Prints consolidated cash flow statement under the indirect method for the year ended December 31, Year 6.
Which of the following is the correct presentation for the change in property, plant, and equipment in the investing section of Prints consolidated cash flow statement for the year ended December 31, Year 6?
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Multiple Choice
Purchase of property, plant, and equipment, -$370,000.
Purchase of property, plant, and equipment, -$810,000.
Proceeds from sale of property, plant, and equipment, +$370,000.
Proceeds from sale of property, plant, and equipment, +$810,000.
\begin{tabular}{lr} \multicolumn{1}{c}{ CONSOLIDATED INCOME AND RETAINED EARNINGS STATEMENT } \\ \multicolumn{1}{c}{ for the Year Ended December 31, Year 6} \\ Sales & $2,500,000 \\ Cost of goods sold & 1,140,000 \\ Research and development expense & 460,000 \\ Administration expenses & 355,000 \\ & 545,0001,955,000 \\ Net operating income & 35,000 \\ Investment income from Run & 580,000 \\ Net income & 80,000 \\ Less: non-controlling interest & 500,000 \\ Net income attributed to Paint's shareholders & 700,000 \\ Retained earnings at January 1, Year 6 & 1,200,000 \\ Dividends declared and paid & $300,000 \\ Retained earnings at December 31, Year 6 & 900,000 \\ \hline \end{tabular}Step by Step Solution
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