Allen Co Held 80% of the Common Stock of Brewer Inc

question 58

Essay

Allen Co. held 80% of the common stock of Brewer Inc. and 40% of this subsidiary's convertible bonds. The following consolidated financial statements were for 2012 and 2013.
Additional Information:
1. Bonds were issued during 2013 by the parent for cash.
2. Amortization of a database acquired in the original combination amounted to $7,000 per year.
3. A building with a cost of $84,000 but a $42,000 book value was sold by the parent for cash on May 11, 2013.
4. Equipment was purchased by the subsidiary on July 23, 2013, using cash.
5. Late in November 2013, the parent issued common stock for cash.
6. During 2013, the subsidiary paid dividends of $14,000.
Required:
Prepare a consolidated statement of cash flows for this business combination for the year ending December 31, 2013. Either the direct method or the indirect method may be used.

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Definitions:

Acetylcholine

A neurotransmitter and chemical that motor neurons of the nervous system release in order to activate muscles.

Secretion

The process by which substances are produced and discharged from a cell, gland, or organ for a particular function in the organism or for excretion.

Terminal Cisternae

Enlarged areas of the sarcoplasmic reticulum around the myofibrils of muscle cells, involved in calcium ion storage.

T-tubules

Tubular extensions of the plasma membrane that penetrate into the center of skeletal and cardiac muscle cells, facilitating the transmission of electrical impulses.