On January 1, 2015, Pam Corporation made a significant acquisition, purchasing 75 percent of SamCorporation's outstanding voting stock for a total of $4,200,000. Sam Corporation's stockholders'equity at that time was made up of the following components (all values in thousands):Capital stock with a par value of $10: $2,000Additional paid-in capital: $1200Retained earnings as of December 31, 2014: $1500Total stockholders' equity: $4700The surplus fair value of the net assets obtained from this acquisition was allocated as follows: 10percent to underappreciated inventory (which was subsequently sold in 2015), 40 percent tounderappreciated plant assets with a remaining useful life of eight years, and the remaining 50 percentto goodwill.Fast forward to December 31, 2019, and the comparative trial balances for both Pam Corporation andSam Corporation as follows: Pam SamOther assets—net $5,845 $4500Investment in Sam—75% 3,640 —Expenses (including cost of sales) 5,285 800Dividends 600 300 $15370 $5600Capital stock, $10 par $4,000 $2,000Additional paid-in capital 850 1200Retained earnings 2,670 1500Sales 7380 900Income from Sam 470 — $15370 $5600 Determine the amounts that would appear in the consolidated financial statements of PamCorporation and Sam for each of the following:1. Goodwill at December 31, 20192. Non-controlling interest share for 2019 3. Consolidated retained earnings at December 31, 2018 4. Consolidated retained earnings at December 31, 20195. Consolidated net income for 2019 6. Non-controlling interest at December 31, 20187. Non-controlling interest at December 31, 2019
On January 1, 2015, Pam Corporation made a significant acquisition, purchasing 75 percent of Sam
Corporation's outstanding voting stock for a total of $4,200,000. Sam Corporation's stockholders'
equity at that time was made up of the following components (all values in thousands):
Capital stock with a par value of $10: $2,000
Additional paid-in capital: $1200
Retained earnings as of December 31, 2014: $1500
Total stockholders' equity: $4700
The surplus fair value of the net assets obtained from this acquisition was allocated as follows: 10
percent to underappreciated inventory (which was subsequently sold in 2015), 40 percent to
underappreciated plant assets with a remaining useful life of eight years, and the remaining 50 percent
to goodwill.
Fast forward to December 31, 2019, and the comparative trial balances for both Pam Corporation and
Sam Corporation as follows:
Pam Sam
Other assets—net $5,845 $4500
Investment in Sam—75% 3,640 —
Expenses (including cost of sales) 5,285 800
Dividends 600 300
$15370 $5600
Capital stock, $10 par $4,000 $2,000
Additional paid-in capital 850 1200
Retained earnings 2,670 1500
Sales 7380 900
Income from Sam 470 —
$15370 $5600
Determine the amounts that would appear in the consolidated financial statements of Pam
Corporation and Sam for each of the following:
1. Goodwill at December 31, 2019
2. Non-controlling interest share for 2019
3. Consolidated retained earnings at December 31, 2018
4. Consolidated retained earnings at December 31, 2019
5. Consolidated net income for 2019
6. Non-controlling interest at December 31, 2018
7. Non-controlling interest at December 31, 2019
Step by step
Solved in 2 steps
