The consolidation worksheet below was prepared on December 31, 20X3. All consolidation entries and adjustments have been entered properly in the worksheet. Protecto accounts for its investment in Strand using the fully adjusted equity method.

a. Prepare a worksheet for a consolidated statement of cash flows for 20X3 using the indirect method. (Values in the first two columns (the "parent" and "subsidiary" balances) that are to be deducted should be indicated with a minus sign, while all values in the "Consolidation Entries" columns should be entered as positive values. For accounts where multiple adjusting entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet.)

b. Prepare a consolidated statement of cash flows for 20X3. (Amounts to be deducted should be indicated with a minus sign.)

Protecto Corporation purchased 60 percent of Strand Company's outstanding shares on January 1, 20X1, for $27,300 more than book value. At that date, the fair value of the noncontrolling Interest was $17,100 more than 40 percent of Strand's book value. The full amount of the differential is considered related to patents and is being amortized over an eight-year period. In 20X1, Strand purchased a plece of land for $72,000 and later in the year sold it to Protecto for $87,000. Protecto is still holding the land as an investment. During 20X3, Protecto bonds with a value of $195,000 were exchanged for equipment valued at $195,000. On January 1, 20X3, Protecto held Inventory purchased previously from Strand for $52,000. During 20x3, Protecto purchased an additional $110,000 of goods from Strand and held $70,000 of this Inventory on December 31, 20X3. Strand sells merchandise to the parent at cost plus a 25 percent markup. Strand also purchases Inventory Items from Protecto. On January 1, 20X3, Strand held Inventory it had previously purchased from Protecto for $21,700, and on December 31, 20X3, It held goods it had purchased from Protecto for $7,000 during 20X3. Strand's total purchases from Protecto In 20x3 were $27,000. Protecto sells Inventory to Strand at cost plus a 40 percent markup. The consolidated balance sheet at December 31, 20X2, contained the following amounts: Credit Debit $ 103,eee 205, eee 152, eee 84, eee 540, eee 33,300 Cash Accounts Receivable Inventory Land Buildings and Equipment Patents Accumulated Depreciation Accounts Payable Bonds Payable Noncontrolling Interest Common Stock Retained Earnings Totals $ 201, eee 165, 540 86, eee 118,760 260, see 286,00 $1,117,300 $1,117,300 PROTECTO CORPORATION AND STRAND COMPANY Consolidation Worksheet December 31, 28x3 Consolidation Entries Protecto Corporation Strand Company DR CR Consolidated Income Statement Sales $530, eee $ 428,eee $110, eee 27,000 $ 813, eee Less: Cost of Goods Sold (395, eee) (388,eee) (557,488) $ 18,480 96,00 6,200 25, eee (43, eee) (33,eee) 5,550 (76, eee) (5,550) (87,688) (52,eee) (35,680) 19,718 $ 76,110 $ 35,000 $ Less: Depreciation Expense Less: Amortization Expense Less: Other Expense Income from Strand Co. Consolidated Net Income NCI in Net Income of Strand Controlling Interest in Net Income Statement of Retained Earnings Beginning Balance Net Income Less: Dividends Declared Ending Balance 23,040 $165,590 12,560 $178,150 3,330 $148,930 2,220 $143, 150 86,450 (18,348) 76,110 $ 76, 110 $ 35,00 $ $ 286,eee 76,118 (63, eee $ 299, 110 $ 205, eee 35,eee (38,000) $ 282,eee $ 205,eee 178,150 $143, 150 38,000 $181,150 $ 286,000 76, 110 (63, eee) $ 299, 110 $383,150 Balance Sheet Assets Cash Accounts Receivable Inventory $ $ 31, eee 95, eee 134, eee $ 44,588 43,888 93,600 75,500 138,888 211,600 $ 14, eee 2.000 27,758 Patent Investment in Subsidiary 168,850 $ 27,750 9,000 6,248 6,208 173,640 16,650 Land Buildings and Equipment Less: Accumulated Depreciation 79, eee 511,000 (171, eee) 23,680 380, eee (186,680) 15, eee 73,60 87,680 738,00 (284, eee) 73, eee Total Assets $ 847,850 $ 399,500 $122,198 $ 294, 290 $1,075,250 Liabilities & Equity Accounts Payable Bonds Payable Connon Stock Retained Earnings NCI in NA of Strand $ 184,740 184,00 268,eee 299,118 $ 16,500 97,600 84,000 202, eee $ 84,000 383,150 6,600 4,160 $477,310 $ 121,240 281, e88 260,00 299, 110 113,900 $181,150 112,960 11,108 $385,218 Total Liabilities & Equity $ 847,850 $ 399,500 $1,075,250