Exercise 5-1 On January 1, 2013, Pam Company purchased an 85% interest in Shaw Company for $537,200. On this date, Shaw Company had common stock of $397,600 and retained earnings of $139,600. An examination of Shaw Company's assets and liabilities revealed that their book value was equal to their fair value except for marketable securities and equipment: Marketable securities Equipment (net) Book Value Fair Value $20,100 119,100 $44,800 141,100