P4-12 Workpapers (two years after acquisition, fair value/book differentials, adjustments)

Pop Corporation acquired an 80 percent interest in Son Corporation for $240,000 on January 1, 2016, when Son’s stockholders’ equity consisted of $200,000 capital stock and $25,000 retained earnings. The excess fair value over book value acquired was assigned to plant assets that were undervalued by $50,000 and to goodwill. The undervalued plant assets had a four-year useful life.

ADDITIONAL INFORMATION