Reference no: EM132597419
The accountant of Kara Enterprises has just finished preparing the consolidated balance sheet, income statement, and retained earnings statement for Year 2, and has asked you for assistance in preparing the consolidated cash flow statement. Kara has only one subsidiary, which is 80% owned, and in addition has a long-term investment of 45% in the outstanding shares of Pacific Finance Co.
The following items have been prepared from the analysis of the Year 2 consolidated statements:
Decrease in accounts receivable $25,000
Increase in accounts payable 3,000
Increase in inventory 15,000
Equity earnings from Pacific Finance 90,000
Increase in bonds payable 120,000
Building purchased for cash 580,000
Depreciation reported for current period 73,000
Gain recorded on sale of equipment 8,000
Carrying amount of equipment sold 37,000
Goodwill impairment loss 3,000
Dividends received from Pacific Finance 25,000
Net income attributable to Kara's shareholders 450,000
Net income attributable to non-controlling interest 14,000
Dividends paid by parent company 60,000
Dividends paid by subsidiary company 30,000
Cash balance, January 1, Year 2 42,000
Required:
Question 1: Prepare the consolidated cash flow statement.