On June 30 2011 Plaster Inc. paid $916 000 for 80 percent of Stucco Company’s outstanding stock.Plaster assessed the acquisition-date fair value of the 20 percent noncontrolling interest at $229 000.At acquisition date Stucco reported the following book values for its assets and liabilities:Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 60 000Accounts receivable . . . . . . . . . . . . . . . . 127 000Inventory . . . . . . . . . . . . . . . . . . . . . . . . 203 000Land . . . . . . . . . . . . . . . . . . . . . . . . . . . 65 000Buildings . . . . . . . . . . . . . . . . . . . . . . . . 175 000Equipment . . . . . . . . . . . . . . . . . . . . . . . 300 000Accounts payable . . . . . . . . . . . . . . . . . (35 000)LO3LO On June 30 Plaster allocated the excess acquisition-date fair value over book value to Stucco’sassets as follows:Equipment (3-year life) . . . . . . . . . . . . . . $ 75 000Database (10-year life) . . . . . . . . . . . . . . 175 000At the end of 2011 the following comparative (2010 and 2011) balance sheets and consolidated incomestatement were available:Plaster Inc. ConsolidatedDecember 31 2010 December 31 2011Cash . . . . . . . . . . . . . . . . . . . . . . . . . . $ 43 000 $ 242 850Accounts receivable (net) . . . . . . . . . . . 362 000 485 400Inventory . . . . . . . . . . . . . . . . . . . . . . . 415 000 720 000Land . . . . . . . . . . . . . . . . . . . . . . . . . . 300 000 365 000Buildings (net) . . . . . . . . . . . . . . . . . . . 245 000 370 000Equipment (net) . . . . . . . . . . . . . . . . . 1 800 000 2 037 500Database . . . . . . . . . . . . . . . . . . . . . . . –0– 166 250Total assets . . . . . . . . . . . . . . . . . . . $3 165 000 $4 387 000Accounts payable . . . . . . . . . . . . . . . . $ 80 000 $ 107 000Long-term liabilities . . . . . . . . . . . . . . . 400 000 1 200 000Common stock . . . . . . . . . . . . . . . . . . 1 800 000 1 800 000Noncontrolling interest . . . . . . . . . . . . –0– 255 500Retained earnings . . . . . . . . . . . . . . . . 885 000 1 024 500Total liabilities and equities . . . . . . . . $3 165 000 $4 387 000PLASTER INC. AND SUBSIDIARY STUCCO COMPANYConsolidated Income StatementFor the Year Ended December 31 2011Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1 217 500Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . . . $737 500Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187 500Database amortization . . . . . . . . . . . . . . . . . . . . . . 8 750Interest and other expenses . . . . . . . . . . . . . . . . . . . 9 750 943 500Consolidated net income . . . . . . . . . . . . . . . . . . . $ 274 000Additional Information for 2011•On December 1 Stucco paid a $40 000 dividend. During the year Plaster paid $100 000 individends.•During the year Plaster issued $800 000 in long-term debt at par.•Plaster reported no asset purchases or dispositions other than the acquisition of Stucco.Prepare a 2011 consolidated statement of cash flows for Plaster and Stucco. Use the indirect methodof reporting cash flows from operating activities.
