(Solution) - The consolidated balance sheet of Pan Corporation and its 80 -(2025 Original AI-Free Solution)

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The consolidated balance sheet of Pan Corporation and its 80 percent subsidiary, Sun Corporation, contains the following items on December 31, 2015 (in thousands):

Pan Corporation uses the equity method of accounting for its investment in Sun. Sun Corporation stock was acquired by Pan on January 1, 2011, when Sun?s capital stock was $400,000 and its retained earnings were $40,000. The fair values of Sun?s net assets were equal to book values on January 1, 2011, and there have been no changes in outstanding stock of either Pan or Sun since January 1, 2011.
REQUIRED: Determine the following:
1. The purchase price of Pan?s investment in Sun stock on January 1, 2011.
2. The total of Sun?s stockholders? equity on December 31, 2015.
3. The balance of Pan?s Investment in Sun account at December 31, 2015.
4. The balances of Pan?s Retained earnings and Capital stock accounts on December 31,2015.