Pop Company acquired a 30 percent interest in Son on January 1 for $500,000 cash. Assume the cost of the investment equals the fair value of Son's net assets. Pop assigned the $125,000 excess of fair value over book value of the interest acquired to the following assets:
Inventories ....................$25,000 (sold in the current year)
Building .........$50,000 (4-year remaining life at January 1)
Goodwill ...................................................$50,000
During the year Son reported net income of $200,000 and paid $50,000 dividends.
Required
1. Determine Pop's income from Son for the year.
2. Determine the December 31 balance of the Investment in Son account?