3/4/23, 6:21 PM Loading..

<< Search more Solutions!

Answer

Solution:-

Pam Corporation and Subsidiary

Consolidation Work-papers for the year ended as on December 31, 2016:-

(in thousands)amount

Adjustments
Consolidated
and
Sun
Pam Statements
75% Eliminations

Income Statement

Sales $1,600 $400 $2,000

Income from Sun 55.2 a 55.2

Cost of sales 1,000* 200* 1,200*

Other expenses 388* 104* c 22.4 514.4*

Consolidated Net Income $ 285.6

Non-controlling share ______ ____ f 18.4 18.4*

Controlling share of NI $267.2 $ 96 $ 267.2

https://exedustack.nl/the-pilot-shortage-may-be-easing-slightly-but-aviation-now-needs-mechanics/ 1/5
3/4/23, 6:21 PM Loading..

Retained Earnings

Retained earnings-Pam $720 $720

Retained earnings -Sun $136 b 136

Controlling share of NI 267.2¼ 96¼ 267.2

Dividends 200* 64* a 48

f 16* 200*

Retained earnings

December 31 $787.2 $168 $787.2

Balance Sheet

Cash $ 212 $ 60 $ 272

Accounts receivable 344 80 424

Dividends receivable

from Sun 24 e 24

Inventories 380 40 420

https://exedustack.nl/the-pilot-shortage-may-be-easing-slightly-but-aviation-now-needs-mechanics/ 2/5
3/4/23, 6:21 PM Loading..

Note receivable from Pam 20 d 20

Land 260 120 380

Buildings-net 680 320 1,000

Equipment -net 520 200 720

a 7.2
Investment in Sun 727.2
b 720

Patents ________ ____ b 224 c 22.4 201.6

$3,147.2 $840 $3,417.6

Accounts payable $ 340 $ 40 $ 380

Note payable to Sun 20 d 20

Dividends payable 32 e 24 8

Capital stock, $10 par 2,000 600 b 600 2,000

Retained earnings 787.2¼ 168¼ 787.2

https://exedustack.nl/the-pilot-shortage-may-be-easing-slightly-but-aviation-now-needs-mechanics/ 3/5
3/4/23, 6:21 PM Loading..

$3,147.2 $840

Non-controlling interest January 1 b 240

Non-controlling interest
_____ f 2.4 242.4
December 31

1,100 1,100 $3,417.6

*Deduct

Supporting Calculations

Sun's value at acquisition

Book value at December 31, 2016 $768

Less: 2016Net income (96)

Add: 2016Dividends 64

Book value on January 1, 2016 $736

Fair value of patents 224

Sun's fair value on January 1, 2016 $960

https://exedustack.nl/the-pilot-shortage-may-be-easing-slightly-but-aviation-now-needs-mechanics/ 4/5
3/4/23, 6:21 PM Loading..

Purchase price (fair value) of Pam's 75% share $720

Non-controlling interest (25%) $240

Patents have a ten-year life, so amortization is $22,400 per year.

Sun's Adjusted Income

Sun's net income $96

Less: Amortization of Patents (22.4)

Sun's adjusted income $73.6

Pam's 75% share $55.2

Non-controlling interest 25% share $ 18.4

Likes: 0 Dislikes: 0

https://exedustack.nl/the-pilot-shortage-may-be-easing-slightly-but-aviation-now-needs-mechanics/ 5/5