Question

Goehring, Inc. owns 70 percent of Harry, Inc. The consolidated income statement for a year reports $40,000 Noncontrolling Interest in Harry, Inc. Income. Harry paid dividends in the amount of $100,000 for the year. What are the effects of these transactions in the consolidated statement of cash flows for the year

Answer 1

Answer:

Therefore would be Decrease in the financing section of the amount of $30,000.

Explanation:

Based on the information given if Goehring Inc owns 70% of Harry, Inc in which the consolidated income statement for a year reported the amount of $40,000 as Noncontrolling Interest in Harry, Inc. Income which means that if Harry paid dividends in the amount of $100,000 for the year the effects of these transactions that occured in the consolidated statement of cash flows for the year will be Decrease in the financing section of the amount of $30,000 calculated as :

Consolidated statement of cash flows=$40,000-(70%*$100,000)

Consolidated statement of cash flows=$40,000-$70,000

Consolidated statement of cash flows=$30,000(Decreased)