Separate company and consolidated financial statements for Pop Corporation and its only subsidiary, Sal Corporation, for 2012 are summarized here. Pop acquired its interest in Sal on January 1, 2011, at a price in excess of book value, which was due to an unrecorded patent.

REQUIRED: Answer the following questions about the financial statements of Pop and Sal.1. What is Pop's percentage interest in Sal Corporation? Provide a computation to explain your answer.2. Does Pop use a one-line consolidation in accounting for its investment in Sal? Explain your answer.3. Were there intercompany sales between Pop and Sal in 2012? If so, show computations.4. Are there unrealized inventory profits on December 31, 2012? If so, show computations.5. Provide computations to explain the difference between the combined separate cost of sales and consolidated cost of sales.6. Explain the difference between combined separate and the consolidated "equipment'net" line item by reconstructing the workpaper entry(s) that was (were) apparently made.7. Are there intercompany receivables and payables? If so, identify them and state the amounts.8. Beginning with the noncontrolling interest at January 1, 2012, provide calculations of the $37,200 noncontrolling interest at December 31, 2012.9. What was the amount of patents at December 31, 2011? Show computations.10. Provide computations to explain the $305,800 Investment in Sal account balance on December 31,2012.

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Pop Sal Consolidated Income Statement $ 716 $ 500 17.4 Sales Income from Sal $300 Gain on equipment Cost of sales Depreciation expense Other expenses Noncontrolling interest share Controlling share of net income 20 (200) (150) (40) (60) (275) (60) (77) (95) (141) (4.6) $ 200.4 200.4 $ 50 Retained Earnings Retained earnings Net income Dividends Retained earnings $ 250 $ 250 $120 200.4 50 200.4 (100) $ 350.4 (100) $ 350.4 (30) $140 Balance Sheet Cash $ 21.1 $ 35 $ 56.1 Accounts receivable-net Dividends receivable 50 13.5 30 70 Inventories Other current assets Land Buildings-net Equipment-net 90 70 60 40 136 110 50 20 50 70 150 100 300 265 550 Consolidated Pop Sal Investment in Sal 305.8 Patents Total assets 32 $500 $ 50 S1.000.4 $ 60 $1.174.1 $ 100 Accounts payable Dividends payable Other liabilities Capital stock, $10 par Retained earnings Noncontrolling interest December 31. 2012 Total equities 15 95 1.5 185 90 500 350.4 200 140 500 350.4 37.2 $500 $1.174.1 S1,000.4