Exercise 5-1

On January 1, 2013, Pam Company purchased an 85% interest in Shaw Company for $541,800. On this date, Shaw Company had common stock of $398,100 and retained earnings of $143,700. An examination of Shaw Companys assets and liabilities revealed that their book value was equal to their fair value except for marketable securities and equipment:

		Book Value		Fair Value
Marketable securities		$19,800		$44,600
Equipment (net)		120,200		140,000

(b)

Determine the amounts at which the above assets (plus goodwill, if any) will appear on the consolidated balance sheet on January 1, 2013.