1. Pam Corporation owns a 70 percent interest in Sun Corporation, acquired several years ago at book value. On December 31, 2016, Sun mailed a check for $80,000 to Pam in part payment of an $160,000 account with Pam. Pam had not received the check when the books were closed on December 31. Pam had accounts receivable of $1,200,000 (including the $160,000 from Sun), and Sun had accounts receivable of $1,760,000 at year-end. In the consolidated balance sheet of Pam Corporation and Subsidiary at December 31, 2016, accounts receivable will be shown at what amount?
Use the following information in answering questions 2 and 3.
Pam Corporation purchased a 70 percent interest in Sun Corporation on January 1, 2016, for $112,000, when Sun’s stockholders’ equity consisted of $24,000 common stock, $80,000 additional paid-in capital, and $16,000 retained earnings. Income and dividend information for Sun is as follows:
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2016
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2017
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2018
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Net income (or loss)
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$8,000
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$1,600
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$(4,000)
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Dividends
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3,200
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800
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