Balance sheet information of Pop and Son Corporations at December 31, 2015, is summarized as follows (in thousands):

On January 2, 2016, Pop purchases 80 percent of Son's outstanding shares for $500,000 cash.
REQUIRED
1. Determine goodwill from the acquisition under (a) parent-company theory and (b) entity theory.
2. Determine noncontrolling interest at January 2, 2016, under (a) parent-company theory and (b) entity theory.
3. Determine the amount of total assets that would appear on a consolidated balance sheet prepared at January 2, 2016, under (a) parent-company theory and (b) entity theory.

Transcribed Image Text:

Pop Book Value Son Fair Value Son Book Value 50 250 $300 $ 40 200 $ 90 360 $450 50 Current assets Plant assets-net S 520 480 $1,000 $ 80 800 120 $1,000 Current liabilities Capital stock Retained earnings 60 $300