P9-7 Computations and entries (parent stock mutually held)

Pop Corporation purchased an 80 percent interest in Son Corporation for $170,000 on January 1, 2016, when Son’s stockholders’ equity was $200,000. The excess of fair value over book value is due to goodwill.

At December 31, 2017, the balance of Pop’s Investment in Son account is $208,000, and the stockholders’ equity of the two corporations is as follows:

Pop Son Capital stock $600,000 $150,000 Retained earnings 200,000 100,000 Total $800,000 $250,000 Indirect and Mutual Holdings 333 On January 2, 2018, Son acquires a 10 percent interest in Pop for $80,000. Earnings and dividends for 2018 are:

Pop Son Separate earnings $100,000 $40,000 Dividends 50,000 20,000 REQuIRED 1. Compute controlling and noncontrolling interest shares of consolidated net income for 2018 using the conventional approach.