Comparative separate-company and consolidated balance sheets for Pam Corporation and its 70 percent-owned subsidiary, Sun Corporation, at year-end 2016, were as follows (in thousands):

Sun's net income for 2017 was $150,000, and its dividends for the year were $80,000 ($40,000 on March 1, and $40,000 on September 1). On April 1, 2017, Pam increased its interest in Sun to 80 percent by purchasing 5,000 shares in the market at $19 per share. Separate incomes of Pam and Sun for 2017 are computed as follows:

REQUIRED
1. Prepare a consolidated income statement for the year ended December 31, 2017.
2. Prepare a schedule to show how Sun's net income and dividends for 2017 are allocated among noncontrolling interests and controlling interests.

Transcribed Image Text:

Pam Sun Consolidated Cash Inventories Other current assets Plant assets-net Investment in Sun Goodwill $ 100 800 500 3,500 600 $ 70 100 130 800 $ 170 900 630 4,300 Total assets Current liabilities Capital stock, $10 par Other paid-in capital Retained earnings Noncontrolling interest $5,500 500 3,000 1,000 1,000 $1,100 300 500 100 200 40 6,040 $ 800 3,000 1,000 1,000 240 6,040 Total equities $5,500 $1,100 Pam Sun $2,000 (1,200) 800 (400) 100) 300 Sales Cost of sales $1,200 (700) Gross profit Depreciation expense Other expenses (300) (50) $ 150 Separate incomes