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Pam Corporation acquires an 80 percent interest in Sun Company on January 3 2016 for $640000 On this date Sun s stockholders equity consists of $400000 capital stock and $280000 retained earning

Pam Corporation acquires an 80 percent interest in Sun Company on January 3, 2016, for $640,000. On this date Sun s stockholders equity consists of $400,000 capital stock and $280,000 retained earnings. The fair value/book value differential is assigned to undervalued equipment with a 6-year remaining life. Immediately after acquisition, Sun sells equipment with a 10-year remaining useful life to Pam at a gain of $20,000. Adjusted trial balances of Pam and Sun at December 31, 2016, are as follows (in thousands): REQUIRED 1. Prepare a consolidated income statement for 2016 using entity theory. 2. Prepare a consolidated balance sheet at December 31, 2016, using entity theory.

Jul 14 2020 View more View Less

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