the textbook solution does not show in detail some of thr calculatioons its the advanced accounting 13th edition beams textbook chapter 6 problem 4. a question similar but not as hard as this will be on my test tomarrow and i am confused in particular on jornal entry 7 how the investment in sun was caculated, please help me!!

i also am confused on how the patent is 600,000.

16. Pop still owns the land. o of equipment with a book value of $20,000 and a remaining useful four years to Son for $40,000. Son uses straight-line depreciation a this equipment depreciation and assumes no salvage value RE OUR ED: Prepare a consolidation workpaper for Pop and subsidiary for the year ende 2016. P6-4 Workpaper (downstream sales, two years) Pam Corporation acquired a 90 percent interest in Sun Corporation on January 1, 2016, for $2,700,000 at which time Sun's capital stock and retained earnings were $1,500,000 and $900,000, respectively. Th fair value cost/book value differential is due to a patent with a 10-year amortization period. Financial statements for Pam and Sun for 2017 are as follows (in thousands): Pam Sun for the Year Ended December 31, 2017 Sales Income from Sun Gain on land Cost of sales Operating expenses 1,900 $ 4,500 346 (2,000) (1,130) (1,000) (400) Net income Add: Retained earnings January 1 Less: Dividends 2,000 (1,500) S 2,266 1,200 Retained earnings, December 31 Intercompany Profit Transactic e Sheet at December 31, 2017 Son Pam Sun Accounts receivable Dividends receivable Inventories S 1,364 1,800 180 140 1,000 Buildings-net 1,000 2,800 3,300 2,922 300 800 1,400 net Machine Investment in Sun $4,000 s 500 Accounts payable $ 2,000 300 1,400 8,000 2,266 $13,966 Dividends payable Other liabilities Capital stock Retained earnings 300 1,500 1,500 4.000 DDITIONAL INFORMATION L. Pam sold inventory to Sun for $600,000 during 2016 and $720,000 during 2017;Sun's inventories a December 31, 2016 and 2017, included unrealized profits of $100,000 and $120,000, respectively. On July 1, 2016, Pam sold machinery with a book value of $280,000 to Sun for $350,000. The machiner a useful life of 3.5 years at the time of intercompany sale, and straight-line depreciation is used dring 2017, Pam sold land with a book value of $150,000 to Sun for $200,000. s accounts receivable on December 31, 2017, includes $100,00 due from Sun. Fam uses the equity method for its 90 percent interest in Sun