Use the information and assumptions from Problem P 11-9 for this problem. The accompanying financial statements are for Pam and Sun Corporations, one year after the acquisition. Note that Sun's statements are presented first under 90 percent push-down accounting, and then under 100 percent push-down accounting.

In E11-10

Sun mailed a check to Pam on December 31, 2017, to settle an account payable of $8,000. Pam received the check in 2018. The $8,000 amount is included in Pam's December 31, 2017, accounts receivable.
Pam Corporation and Sun Corporation Comparative Financial Statements with Push-Down Accounting at and for the Year Ended December 31, 2017 (in Thousands)

REQUIRED:
Prepare consolidation workpapers for Pam Corporation and Subsidiary for the year ended December 31, 2017, under (a) 90 percent push-down accounting and (b) 100 percent push-down accounting.

Transcribed Image Text:

Book Value Fair Value $ 20 50 40 15 30 70 $225 45 60 100 20 $225 $ 20 50 30 15 50 100 $265 $ 45 60 Cash Accounts receivable-net Inventories Land Buildings-net Equipment-net Total assets Accounts payable Other liabilities Capital stock Retained earnings Total equities Push Down 90% Sun Push Down 100% Sun Basic Accounting Pam Income Statement Sales Income from Sun Cost of sales Depreciation expense Other operating expenses $310.8 37.8 (140) (29) (45) $134.6 $110 $110 (33) (24.2) (32) (25) $41.8 $ 42 Net income Retained Earnings Retained earnings-beginning Add: Net income Deduct: Dividends $147 134.6 (60) $221.6 41.8 (10) 31.8 (10) Retained earnings-ending Balance Sheet Cash Accounts receivable Dividends receivable Inventories Land Buildings-net Equipment-net Investment in Sun Goodwill $ 32 S63.8 90 27 40 $ 27 40 20 40 140 165 208.8 35 15 43.2 77.6 35 15 45 80 36 40 $282 $ 20 10 20 100 100 32 $282 $736.6 $273.8 $ 20 Total assets Accounts pavable Dividends payable Other liabilities Capital stock Push-down capital Retained earnings $125 15 75 300 20 100 92 31.8 221.6 $736.6 Total equities $273.8