P 11-8 Journal entries and calculations for push-down accounting Pop Corporation paid $3,000,000 for an 80 percent interest in Son Corporation on January 1, 2016, when the book values and fair values of Son’s assets and liabilities were as follows (in thousands):

Book Value Fair Value Cash $ 300 $ 300 Accounts receivable—net 600 600 Inventories 800 2,400 Land 200 200 Buildings—net 600 600 Equipment—net 1,000 500

$3,500 $4,600 Accounts payable $ 500 $ 500 Long-term debt 1,000 1,000 Capital stock, $1 par 800 Retained earnings 1,200

$3,500 REQuIRED 1. Prepare a journal entry on Son’s books to push down 80 percent of the values reflected in the purchase price (the parent-company-theory approach).

2. Prepare a journal entry on Son’s books to push down 100 percent of the values reflected in the purchase price (the entity-theory approach).

3. Calculate the noncontrolling interest in Son on January 1, 2016, under parent-company theory.

4. Calculate the noncontrolling interest in Son on January 1, 2016, under entity theory.