P9-4 Computations for mutually held subsidiaries A schedule of intercompany investment interests and separate earnings for Par Corporation, Sit Corporation, and Tot Corporation is presented as follows:

Percentage Interest in Sit Percentage Interest in Tot Separate Earnings Current Year Par Corporation 80% 50% $400,000 Sit Corporation — 20 200,000 Tot Corporation 10 — 100,000 REQuIRED 1. Compute controlling interest share and noncontrolling interest share of consolidated net income assuming no investment differences between fair value and book value or unrealized profits.

2. Compute controlling interest share and noncontrolling interest share assuming $20,000 unrealized inventory profits on Tot’s sales to Sit and a $40,000 gain on Par’s sale of land to Sit.

P9-5 Mutual Holdings: Treasury Stock—Year after acquisition, recording error Pamela Inc. acquired a 90 percent interest in Shin Inc. for $288,000 in cash on January 1, 2013, when Shin’s equity was at $310,000 and, at the same time, Shin Inc. acquired a 10 percent interest in Pamela Inc. for $80,000, when Pamela’s equity was at $700,000. The book value of net assets was equal to fair value. Trial balances of Pamela Inc. and Shin Inc. for the year ended December 31, 2014. before the equity method was employed (Pamela mistakenly recorded the dividend under cost method) (in thousands) were as follows:

Pamela Shin Debit Other assets $600.00 $274.00 Investment in S 315.00 —

Investment in P — 80.00 Expenses including COGS 100.00 70.00 Dividend 40.00 30.00

$1,055.00 $454.00 Credits Common stock $500.00 $200.00 Retained earnings 308.00 140.00 Sales 220.00 110.00 Dividend income 27.00 4.00

$1,055.00 $454.00