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Pam Corporation acquired an 80 percent interest in Sun Corporation on January 1 2016 for $108000 cash when Sun s capital stock was $100000 and retained earnings were

Pam Corporation acquired an 80 percent interest in Sun Corporation on January 1, 2016, for $108,000 cash, when Sun s capital stock was $100,000 and retained earnings were $10,000. The difference between investment fair value and book value acquired is due to a patent being amortized over a 10-year period. Separate financial statements for Pam and Sun on December 31, 2019, are summarized as follows (in thousands): ADDITIONAL INFORMATION 1. Sun s sales include intercompany sales of $8,000, and Pam s December 31, 2019, inventory includes $1,000 profit on goods acquired from Sun. Pam s December 31, 2018, inventory contained $2,000 profit on goods acquired from Sun. 2. Pam owes Sun $4,000 on account. 3. On January 1, 2018, Sun sold plant assets to Pam for $60,000. These assets had a book value of $40,000 on that date and are being depreciated by Pam over five years. 4. Pam uses the equity method to account for its investment in Sun. REQUIRED: Prepare a consolidation workpaper for Pam Corporation and Subsidiary for 2019.

Apr 21 2020 View more View Less

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