Pop Corporation acquired a 70 percent interest in Son Corporation on January 1, 2016, for $2,800,000, when Son’s stockholders’ equity consisted of $2,000,000 capital stock and $1,200,000 retained earnings. On this date, the book value of Son’s assets and liabilities was equal to the fair value, except for inventories that were undervalued by $80,000 and sold in 2016, and plant assets that were undervalued by $320,000 and had a remaining useful life of eight years from January 1. Son’s net income and dividends for 2016 were $280,000 and $40,000, respectively.
Separate-company balance sheet information for Pop and Son Corporations at December 31, 2016, follows (in thousands):
Image transcription text
Dividends receivable 28 Inventories 2,000 1,280 Land 400 600 Plant assets-net 2,800 1,400 Investment in
Son 2,884 $10,112 $4,200 Accounts payable-suppliers $ 1,200 $ 320 Accounts payable to Son 4… Show more
Required: Prepare consolidated balance sheet workpapers for Pop Corporation and Subsidiary at December
31, 2016.
