P 3-1 Prepare a consolidated balance sheet at acquisition and compute consolidated net income one year later On December 31, 2016, Pam Corporation purchased 80 percent of the stock of Sun Company at book value. The data reported on their separate balance sheets immediately after the acquisition follow. At December 31, 2016, Pam Corporation owes Sun $20,000 on accounts payable. (All amounts are in thousands.) Pam Sun Assets Cash $ 128 $ 72 Accounts receivable 180 136 Inventories 572 224 Investment in Sun 800 Equipment—net 1,520 700 $3,200 $1,132 Liabilities and Stockholders’ Equity Accounts payable $ 160 $ 132 Common stock, $20 par 1,840 600 Retained earnings 1,200 400 $3,200 $1,132 Required Prepare a consolidated balance sheet for Pam Corporation and Subsidiary at December 31, 2016. Compute consolidated net income for 2017 assuming that Pam Corporation reported separate income of $680,000 and Sun Company reported net income of $360,000. (Separate incomes do not include income from the investment in Sun.)
P 3-1 Prepare a consolidated balance sheet at acquisition and compute consolidated net income one year later
On December 31, 2016, Pam Corporation purchased 80 percent of the stock of Sun Company at book value. The data reported on their separate balance sheets immediately after the acquisition follow. At December 31, 2016, Pam Corporation owes Sun $20,000 on accounts payable. (All amounts are in thousands.)
|
|
Pam |
Sun |
|---|---|---|
|
Assets |
|
|
|
Cash |
$ 128 |
$ 72 |
|
|
180 |
136 |
|
Inventories |
572 |
224 |
|
Investment in Sun |
800 |
|
|
Equipment—net |
1,520 |
700 |
|
|
$3,200 |
$1,132 |
|
Liabilities and |
|
|
|
Accounts payable |
$ 160 |
$ 132 |
|
Common stock, $20 par |
1,840 |
600 |
|
|
1,200 |
400 |
|
|
$3,200 |
$1,132 |
Required
-
Prepare a consolidated balance sheet for Pam Corporation and Subsidiary at December 31, 2016.
-
Compute consolidated net income for 2017 assuming that Pam Corporation reported separate income of $680,000 and Sun Company reported net income of $360,000. (Separate incomes do not include income from the investment in Sun.)
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