E 8-8 Subsidiary issues additional stock under different assumptions Pam Corporation owns two-thirds (600,000 shares) of the outstanding $1 par common stock of Sun Company on January 1, 2016. In order to raise cash to finance an expansion program, Sun issues an additional 100,000 shares of its common stock for $5 per share on January 3, 2016. Sun’s stockholders’ equity before and after the new stock issuance is as follows (in thousands):

Before Issuance After Issuance Common stock, $1 par $ 900 $1,000 Additional paid-in capital 600 1,000 Retained earnings 600 600 Total stockholders’ equity $2,100 $2,600 REQuIRED 1. Assume that Pam purchases all 100,000 shares of common stock directly from Sun.

a. What is Pam’s percentage ownership interest in Sun after the purchase?

b. Calculate goodwill from Pam’s acquisition of the 100,000 shares of Sun.