Separate-company financial statements for Pop Corporation and its subsidiary, Son Company, at and for the year ended December 31, 2017, are summarized as follows (in thousands):

Additional Information
1. Pop Corporation acquired 13,500 shares of Son Company stock for $15 per share on January 1, 2016, when Son's stockholders' equity consisted of $150,000 capital stock and $15,000 retained earnings.
2. Son Company's land was undervalued when Pop acquired its interest, and accordingly, $20,000 of the fair value/book value differential was assigned to land. Any remaining differential is goodwill.
3. Son Company owes Pop $5,000 on account, and Pop owes Son $5,000 on a note payable.
Required:
Prepare consolidation work-papers for Pop Corporation and Subsidiary for the year ended December 31, 2017?

Transcribed Image Text:

Pop Son Combined Income and Retained Earnings Statement for the Year Ended December 3.1 $100 Income from Son Cost of sales Expenses 21.6 (250) (100.6) (50) (26) Net income Add: Retained earnings January 1 Deduct: Dividends 181 (50) $202 34 (16) Retained earnings December 31 Balance Sheet at December 31 $ 18 80 $ 15 20 Accounts receivable-net Dividends receivable from Son Note receivable from Pop Inventory Investment in Son 7.2 95 226.8 65 170 130 10 30 Buildings-net Equipment-net Total assets Accounts payable Note payable to Son Dividends payable $ 85 $ 10 Capital stock, $10 par Retained earnings Total equities 500 202 $792 150 42