Question 5 (20 marks) Compulsory ABC Company holds 80 percent ownership of XYZ Company. The consolidated balance sheets as of December 31, 2013, and December 31, 2014, are as follows: Dec. 31, 2013 Dec. 31, 2014 Cash $ 83,000 $ 181,000 Accounts Receivable 210,000 175,000 Inventory 320,000 370,000 Land 190,000 160,000 Buildings & Equipment 850,000 980,000 Less: Accumulated Depreciation (280,000) (325,000) Goodwill 40,000 28.000 Total Assets $1.413.000 $1.569.000 Accounts Payable $ 52,000 $ 74,000 Interest Payable 45,000 30,000 Bonds Payable 400,000 500,000 Bond Premium 18,000 16,000 Noncontrolling Interest 40,000 44,000 Common Stock 300,000 300,000 Additional Paid-In Capital 70,000 70,000 Retained Earnings 488,000 535 000 Total Liabilities & Owners' Equity $1.413.000 S1.569.000 $600,000 The 2014 consolidated income statement contained the following amounts: Sales Cost of Goods Sold Depreciation Expense Interest Expense Loss on Sale of Land Goodwill impairment Loss Consolidated Net Income Income to Noncontrolling Interest Income to controlling Interest $375,000 45,000 69,000 20,000 12.000 1521.000 $ 79,000 (7.000) $ 72.000 ABC acquired its investment in XYZ on January 1, 2012, for $176,000. At that date, the fair value of the noncontrolling interest was $44,000, and XYZ reported net assets of $150,000. A total of $40,000 of the excess price over fair value was assigned to goodwill. The remainder of the excess price over fair value was assigned to equipment with a remaining life of 20 years from the date of combination ABC sold $100,000 of bonds on December 31, 2014, to assist in generating additional funds. XYZ reported net income of $35,000 for 2014 and paid dividends of $15,000. ABC reported 2014 equity-method net income of $80,000 and paid dividends of $25,000 Required Prepare a consolidated statement of cash flows for 2014 using the indirect method