Allen CoHeld 80% of the Common Stock of Brewer Inc

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 2010 and 2011.
Additional Information:
Bonds were issued during 2011 by the parent for cash.
Amortization of a database acquired in the original combination amounted to $7,000 per year.
A building with a cost of $84,000 but a $42,000 book value was sold by the parent for cash on May 11,2011. $\begin{array}{lcc}&\underline{2010}&\underline{2011}\\ \text { Revenues } & \$ 1,064,000 & \$ 1,232,000 \\ \text { Cost of goods sold } & 714,000) & ( 756,000) \\ \text { Depreciation and amortization } & 126,000) & ( 140,000) \\ \text { Gain on sale of building } & -0- & 28,000 \\\text { Interest expense } & (42.000) & ( 42,000) \\\text { Noncontrolling interest } & \$ 12.600 & \$ 15.400 \\\text { Net income to controlling interest } & \$ 169,400 & \$ 306,600 \\\\ \text { Retained earnings, January } 1 & \$ 420,000 & \$ 519,400 \\ \text { Net income (from above) } & 169,400 & 306,600 \\ \text { Dividends paid } & ( 70,000) &(140,000) \\\text { Retained earnings, December } 31 & \$ 519,400 &\$ 686,000 \\\\ \text { Cash } & \$ 112,000 & \$ 196,000 \\ \text { Accounts receivable } & 210,000 & 196,000 \\ \text { Inventory } & 280,000 &476,000 \\ \text { Buildings and equipment (net) } & 896,000 & 966,000 \\\text { Database } & 210,000 & 203,000 \\\text { Total assets } & \$ 1,708,000 & \$ 2,037,000 \\\\\text { Accounts payable } &\$ (196,000) & \$(140,000) \\\text { Bonds payable } & (560,000) & (720,000) \\\text { Noncontrolling interest in Brewer Inc. } & (44.800) & 57,400) \\ \text { Common stock } & (140,000) & (168,00 \\ \text { Additional paid-in capital } & (247,800) & (265,6 \\\text { Retained earnings, December } 31 \text { (from above) } & (519,400) & (686,00 \\ \text { Total liabilities and stockholders' equity } & \$(1,708,000) & \$(2,037,00 \\\end{array}$
Equipment was purchased by the subsidiary on July 23,2011,using cash.
Late in November 2011,the parent issued common stock for cash.
During 2011,the subsidiary paid dividends of $14,000.
Required:
Prepare a consolidated statement of cash flows for this business combination for the year ending December 31,2011.Either the direct method or the indirect method may be used.