Extracted text: [Appendix] Journal entries to record a pooling On January 1, 2000, Pam Corporation held 2,000 shares of Sun Corporation common stock acquired at $15 per share several years earlier. On this date, Pam issued 1.5 of its $10 par value shares for each of the other 98,000 outstand- ing shares of Sun in a pooling of interests in which Sun Corporation was dissolved. Sun Corporation's after-closing trial balance on December 31, 1999, consisted of the following (in thousands): $ 800 1,500 Current assets Plant and equipment-net Liabilities Capital stock, $5 par Additional paid-in capital Retained earnings $ 200 500 1,000 600 $2,300 $2,300 REQUIRED: Prepare a journal entry (or entries) on Pam's books to account for the pooling of interests. (Hint: Do not forget to consider the 2,000 shares of Sun held by Pam on January 1, 2000.) PROBLEMS P1-1 Acquisition journal entries Phen Ltd. issued 500,000 common shares of $10 at par and paid $1,000,000 for the net assets of Sung Ltd. on August 17, 2014. The market value of Phen Ltd.'s stocks was $20 per share at the time. Sung Ltd. was dissolved immediately after the acquisition. The information related to Sung Ltd.'s net assets is as follows (in thousands): Book Value Fair Value Cash $2,000 $2,000 Trade receivables 800 600 3,200 1,000 6,000 Inventories Prepaid expenses Land Building-net Equipment-net Trade payable Notes payable Bonds payable Common stock, $5 par Retained Earnings 3,000 1,000 6,800 10,100 3,000 1,500 4,600 7,100 10,000 3,500 1,300 4,300 6,600 5,300 9,000 REQUIRED: Prepare the necessary journal entries for the acquisition. P1-2 Balance sheet after an acquisition On December 31, Jose SA acquired Carlos SA by issuing 200,000 common shares with a par value of $10. The market value for these common shares was $10,000,000 at the date of acquisition. Below is the balance sheet and fair value information for Jose SA and Carlos SA immediately before the acquisition (in thousands): Business Combinations 47 Jose SA Jose SA Carlos SA Carlos SA (Book Value) (Fair Value) (Book Value) (Fair Value) $2,000 13,000 15,000 5,000 12,000 $2,000 20,000 20,000 S1,000 8,000 10,000 2,000 $1,000 12,000 13,000 4,000 13,000 4,000 12,000 8,000 O par 10,000 5,000 3,000 4,000