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Pop Corporation acquired 80 percent of Son Corporation s common stock on January 1, 2016, for $420,000 cash The stockholders equity of Son at this time consisted of $300000 capital stock and

Pop Corporation acquired 80 percent of Son Corporation s common stock on January 1, 2016, for $420,000 cash The stockholders equity of Son at this time consisted of $300000 capital stock and

Pop Corporation acquired 80 percent of Son Corporation s common stock on January 1, 2016, for $420,000 cash. The stockholders equity of Son at this time consisted of $300,000 capital stock and $100,000 retained earnings. The difference between the fair value of Son and the underlying equity acquired in Son was due to a $25,000 undervaluation of Son s inventory, a $50,000 undervaluation of Son s equipment, and goodwill. The undervalued inventory was sold by Son during 2016, and the undervalued equipment had a remaining useful life of five years. Straight-line depreciation is used. Son owed Pop $8,000 on accounts payable at December 31, 2016. The separate financial statements of Pop and Son Corporations at and for the year ended December 31, 2016, are as follows (in thousands): Required: Prepare consolidation work-papers for Pop Corporation and Son at and for the year ended December 31, 2016?

Tripti 09-Jul-2020

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