Pam Corporation paid $170,000 for an 80 percent interest in Sun Corporation on December 31, 2016, when Sun's stockholders' equity consisted of $100,000 capital stock and $50,000 retained earnings. A summary of the changes in Pam's Investment in Sun account from December 31, 2016, to December 31, 2020, follows (in thousands):
Investment cost December 31, 2016 ....................................................... $170
Increases
80% of Sun's net income 2017 through 2020 ..............................................112
.....................................................................................................282
Decreases
80% of Sun's dividends 2017 through 2020 ................................$56
80% of Amortization of excess fair value over book value:
Assigned to inventories, $8,750 (sold in 2017) ................................7
Assigned to plant assets, $22,500 (depreciated................................8
over a nine-year period) 2017 through 2020
Assigned to patents, $31,250 (amortized over
a five-year period) 2017 through 2020 .......................................20 ...........91
Investment balance December 31, 2020 .................................................$191
Financial statements for Pam and Sun at and for the year ended December 31, 2020, are summarized as follows (in thousands):

Additional Information
1. The accounts payable of Sun at December 31, 2020, include $5,000 owed to Pam.
2. Pam advanced $25,000 to Sun during 2018. This advance is still outstanding.
3. Half of Sun's 2020 dividends will be paid in January 2021.
Required:
Prepare work-papers to consolidate the balance sheets only of Pam and Sun Corporations at December 31, 2020?

Transcribed Image Text:

Pam Sun Combined Income and Retained Earnings Statements for the Year Ended December 3I Sales Income from Sun Cost of sales Other expenses $300 25 (180) (50) 95 255 (50) $300 $200 (140) (20) Net income Add: Retained earnings January1 Deduct: Dividends 100 (20) $120 Retained earnings December 31 Balance Sheet at December 31 Cash Trade receivable s-net Dividends receivable Advance to Sun Inventories Plant assets-net Investment in Sun $41 60 $35 25 125 300 191 $750 35 175 Total assets $300 Accounts payable Dividends payable $ 50 $45 10 25 100 120 $300 dvance from Pam Capital stock Retained earnings Total equities 400 300 $750