E2-10 Calculate income and investment balance for midyear investment Pam Corporation acquired 25 per

 
   

Need your ASSIGNMENT done? Use our paper writing service to score better and meet your deadlines.  

E2-10 Calculate income and investment balance for midyear investment Pam Corporation acquired 25 percent of Sun Corporation's outstanding common stock on October 1, for $300,000. A summary of Sun's adjusted trial balances on this date and at December 31 follows (in thousands): October 1 December 31 Debits $ 250 750 400 Current assets Plant assets-net $125 775 Expenses (including cost of goods sold) Dividends (paid in July) 300 100 100 $1,300 $1,500 Credits Current liabilities $150 500 250 $100 Capital stock (no change during the year) Retained earnings January Sales 500 250 600 450 $1.500 S1.300 Pam uses the equity method of accounting. No information is available concerning the fair values of Sun's assets and liabilities REQUIRED 1. Determine Pam's investment income from Sun Corporation for the year ended December 31 2. Compute the corect balance of Pam's investment in Sun account at December 31.