Pin Corporation acquired a 90 percent interest in Sun Corporation for $360,000 cash on January 2, 2009, when Sun had capital stock of $200,000 and retained earnings of $150,000. Sun purchased its 10 percent interest in Pin in 2010 for $80,000. The excess of Pin’s investment fair value over book value acquired is due to goodwill.
Financial statements for the year ended December 31, 2013, are as follows (in thousands):
| Pin | Sun |
Combined Income and Retained Earnings Statement for the Year Ended December 31 | ||
Sales | $400 | $100 |
Investment income | 27 | — |
Dividend income | — | 10 |
Cost of goods sold | (200) | (50) |
Expenses | (50) | (30) |
Net income | 177 | 30 |
Add: Beginning retained earnings | 300 | 200 |
Deduct: Dividends | (100) | (20) |
Retained earnings December 31 | $377 | $210 |
Balance Sheet at December 31 | ||
Other assets | $486 | $420 |
Investment in Sun (90%) | 414 | — |
Investment in Pin (10%) | — | 80 |
Total assets | $900 | $500 |
Liabilities | $123 | $ 90 |
Capital stock | 400 | 200 |
Retained earnings | 377 | 210 |
Total equities | $900 | $500 |
REQUIRED: Prepare a consolidation workpaper using the treasury stock approach.
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