708 P4-6 Workpapers (determine ownership interest, year after acquisition, excess assigned to land and patents) 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): Pop Son Combined Income and Retained Earnings Statements for the Year Ended December 31 Sales $ 1.600 Income from Son 72 Cost of sales (1,000) Other Expenses (402.4) Net income 269.6 Add: Retained earnings January 1 Deduct: Dividends (200) Retained carnings December 31 $ 777.6 Balance Sheet at December 31 Cash $ 72 Accounts receivable net 320 Dividends receivable from Son 28.8 Note receivable from Pop Inventory Investment in Son 878.4 Land 260 Buildingsnet 680 Equipment-net 520 Total assets $3.139.2 Accounts payable $ 341.6 Note payable to Son Dividends payable Capital stock, $40 par 2.000 Retained earnings 777.6 Total equities $3.139.2 8 # | ] | R | all | [ 380 20 Consolidation Techniques and Procedures 157 ADDITIONAL INFORMATION 1. Pop Corporation acquired 13.500 shares of Son Company stock for $60 per share on January 1, 2016, when Son's stockholders' equity consisted of $600,000 capital stock and $60,000 retained earnings. 2. Son Company's land was undervalued when Pop acquired its interest, and accordingly, $80,000 of the fair value/book value differential was assigned to land. Any remaining differential is assigned to unrecorded patents with a 10-year remaining life. 3. Son Company owes Pop $20,000 on account, and Pop cwes Son $20,000 on a note payable. REQUIRED: Prepare consolidated workpapers for Pop Corporation and Subsidiary for the year ended Decem- ber 31, 2017