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	$ 60,000
Accounts receivable	127,000
Inventory	203,000
Land	65,000
Buildings	175,000
Equipment	300,000
Accounts payable	(35,000)

On June 30, Plaster allocated the excess acquisition-date fair value over book value to Stucco’s assets as follows:

Equipment (3-year life)	$ 75,000
Database (10-year life)	175,000

At the end of 2011, the following comparative (2010 and 2011) balance sheets and consolidated income statement were available:

Plaster, Inc December 31, 2010	Consolidated December 31, 2011
Cash	$ 43,000	$ 242,850
Accounts receivable (net)	362,000	485,400
Inventory	415,000	720,000
Land	300,000	365,000
Buildings (net)	245,000	370,000
Equipment (net)	1,800,000	2,037,500
Database	–0–	166,250
Total assets	$3,165,000	$4,387,000
Accounts payable	$ 80,000	$ 107,000
Long-term liabilities	400,000	1,200,000
Common stock	1,800,000	1,800,000
Noncontrolling interest	–0–	255,500
Retained earnings	885,000	1,024,500
Total liabilities and equities	$3,165,000	$4,387,000

 

PLASTER, INC, AND SUBSIDIARY STUCCO COMPANY Consolidated Income Statement For the Year Ended December 31, 2011
Revenues	$1,217,500
Cost of goods sold	$737,500
Depreciation	187,500
Database amortization	8,750
Interest and other expenses	9,750	943,500
Consolidated net income	$ 274,000

Additional Information for 2011

• On December 1, Stucco paid a $40,000 dividend. During the year, Plaster paid $100,000 in dividends.

• 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 method of reporting cash flows from operating activities.