Fundamentals of Advanced Accounting 5th Edition by Joe Ben Hoyle,Thomas Schaefer,Timothy Doupnik

Exercise 24

Rodriguez Company holds 80 percent of the common stock of Molina, Inc., and 30 percent of this subsidiary's convertible bonds. The following consolidated financial statements are for 2012 and 2013:

Additional Information for 2013
• The parent issued bonds during the year for cash.
• Amortization of databases amounts to $5,000 per year.
• The parent sold a building with a cost of $60,000 but a $30,000 book value for cash on May 11.
• The subsidiary purchased equipment on July 23 using cash.
• Late in November, the parent issued stock for cash.
• During the year, the subsidiary paid dividends of $10,000.
Prepare a consolidated statement of cash flows for this business combination for the year ending December 31, 2013. Either the direct or the indirect method may be used.