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Billing Enterprises purchases a 90% interest in the common stock of Rush Corporation on January 1 2011 for an agreed-upon price of $495000 Billing issues $400000 of bonds to Rush shareholders

Billing Enterprises purchases a 90% interest in the common stock of Rush Corporation on January 1, 2011, for an agreed-upon price of $495,000. Billing issues $400,000 of bonds to Rush shareholders plus $95,000 cash as payment. Rush’s balance sheet on the acquisition date is as follows: Rush’s equipment is understated by $20,000 and has a remaining depreciable life of five years. Any remaining excess is attributed to goodwill. In addition to the bonds issued as part of the purchase, Billing sells additional bonds in the amount of $100,000. Consolidated net income for 2011 is $92,300. The controlling interest is $87,700, and the non-controlling interest is $4,600. Rush pays $10,000 in dividends to all shareholders, including Billing Enterprises. No plant assets are purchased or sold during 2011. Comparative balance sheet data are as follows: Required Prepare a consolidated statement of cash flows using the indirect method for the year ended December31, 2011. Supporting schedules (including a D&D schedule) should be in good form.

Jul 15 2020 View more View Less

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