Pop Corporation paid $1,190,000 cash for 70 percent of the outstanding voting stock of Son Corporation on

Question:

Pop paid $1,190,000 cash for 70 percent of the outstanding voting stock of Son on January 2, 2017, when Son Corporation's stockholders' equity consisted of $1,000,000 of $10 par common stock and $500,000 retained earnings. The book values of Son's assets and liabilities were equal to their fair values on this date.
During 2017, Pop had separate income of $600,000 and paid dividends of $300,000.
Son Corporation's net income for 2017 was $180,000 and its dividends were $100,000. At December 31, 2017, the stockholders' equities of Pop and Son were as follows (in thousands):

Pop Corporation paid $1,190,000 cash for 70 percent of the

There were no intercompany transactions between Pop Corporation and Son Corporation during
2017. Pop uses the equity method of accounting for its investment in Son.
REQUIRED
1. Assume that Pop Corporation uses parent-company theory for preparing consolidated financial statements for 2017. Determine the following amounts:
a. Pop Corporation's income from Son for 2017
b. Goodwill that will appear in the consolidated balance sheet at December 31, 2017
c. Consolidated net income for 2017
d. Noncontrolling interest expense for 2017
e. Noncontrolling interest at December 31, 2017
2. Assume that Pop Corporation uses entity theory for preparing consolidated financial statements for 2017.
Determine the following amounts:
a. Pop Corporation's income from Son for 2017
b. Goodwill that will appear in the consolidated balance sheet at December 31, 2017
c. Total consolidated income for 2017
d. Noncontrolling interest share for 2017
e. Noncontrolling interest at December 31, 2017

Goodwill
Goodwill is an important concept and terminology in accounting which means good reputation. The word goodwill is used at various places in accounting but it is recognized only at the time of a business combination. There are generally two types of... Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...