Pam Corporation purchased 75 percent of the outstanding voting stock of Sun Corporation for $4,800,000 on January

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Pam Corporation purchased 75 percent of the outstanding voting stock of Sun Corporation for $4,800,000 on January 1, 2016. Sun's stockholders' equity on this date consisted of the following (in thousands):
Capital stock, $10 par ................................ $2,000
Additional paid-in capital ............................ 1,200
Retained earnings December 31, 2015 ............. 1,600
Total stockholders' equity .......................... $4,800
The excess fair value of the net assets acquired was assigned 10 percent to undervalued inventory (sold in 2016), 40 percent to undervalued plant assets with a remaining useful life of eight years, and 50 percent to goodwill.
Comparative trial balances of Pam Corporation and Sun at December 31, 2020, are as follows (in thousands):
______________________________ Pam ____________ Sun
Other assets-net .......................$7,530 ...............$5,200
Investment in Sun-75% ............... 4,680 ..................-
Expenses (including cost of sales) ... 6,370 ................1,200
Dividends ................................1,000 ..................400
............................................$19,580 .............$6,800
Pam Corporation purchased 75 percent of the outstanding voting stock

Required:
Determine the amounts that would appear in the consolidated financial statements of Pam Corporation and Subsidiary for each of the following items:
1. Goodwill at December 31, 2020
2. Non-controlling interest share for 2020
3. Consolidated retained earnings at December 31, 2019
4. Consolidated retained earnings at December 31, 2020
5. Consolidated net income for 2020
6. Non-controlling interest at December 31, 2019
7. Non-controlling interest at December 31, 2020?

Goodwill
Goodwill is an important concept and terminology in accounting which means good reputation. The word goodwill is used at various places in accounting but it is recognized only at the time of a business combination. There are generally two types of...
Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
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...
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Advanced Accounting

ISBN: 978-0134472140

13th edition

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

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