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Pam Corporation owned a 90 percent interest in Sun Corporation, and during 2015 the following changes occurred in Sun's equity

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Pam Corporation owned a 90 percent interest in Sun Corporation, and during 2015 the following changes occurred in Sun's equity and Pam's investment in Sun (in thousands):
Pam Corporation owned a 90 percent interest in Sun Corporation,

During 2016, Sun's net income was $280,000, and it declared $40,000 dividends each quarter of the year.
Pam reduced its interest in Sun to 80 percent on July 1, 2016, by selling Sun shares for $120,000.
REQUIRED
1. Prepare the journal entry on Pam's books to record the sale of Sun shares as of the actual date of sale.
2. Prepare the journal entry on Pam's books to record the sale of Sun shares as of January 1, 2016.
3. Prepare a schedule to reconcile the answers to parts 1 and 2.

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
Transcribed Image Text:

Sun's Stockholders' Investment in Sun(90%) Equity $1,000 250 (150) $1,100 Goodwill Balance, January 1, 2015 Income-2015 Dividends-2015 $49.5 $ 949.5 225 (135) $1,039.5 Balance, December 31, 201:5 $49.5

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1 Journal entry to record sale as of actual sale date Cash 120 000 Additional paid in capital 1 500 …View the full answer


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Advanced Accounting

Advanced Accounting

ISBN: 978-0134472140

13th edition

Authors: Floyd A. Beams, Joseph H. Anthony, Bruce Bettinghaus, Kenneth Smith

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Question Details
Chapter # 8
Section: Problems
Problem: 3
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Question Posted: February 28, 2017 12:04:30
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