2.5

Please, provide step by step explanation as well as each calculation for each number you get. Thanks

E2-5 Calculate income and investment balance allocation of excess to undervalued assets Pop Company acquired a 30 percent interest in Son on January 1 for $500,000 cash. Assume the cost of the investment equals the fair value of Son's net assets. Pop assigned the $125,000 excess of fair value over book value of the interest acquired to the following assets: Inventories $25,000 (sold in the current year) Building $50,000 (4-year remaining life at January 1) Goodwill $50,000 During the year Son reported net income of $200,000 and paid $50,000 dividends. REQUIRED 1. Determine Pop's income from Son for the year. 2. Determine the December 31 balance of the Investment in Son account