Pop Corporation acquired 13,500 shares of Son Company stock (90% of Son Corporation) for $60 per share on January 1, 2016, when Sons stockholders equity consisted of $600,000 capital stock and $60,000 retained earnings. Son Companys 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. Son Company owes Pop $20,000 on account, and Pop owes Son $20,000 on a note payable. Separate company financial statements for Pop Corporation and its subsidiary, Son Company, at and for the year ended December 31, 2017, are summarized as in next page. REQUIRED: 1- Prepare consolidation workpapers for Pop Corporation and Subsidiary for the year ended December 31, 2017 Show the steps of your calculations and entries

Pop Son Dr Cr Sales $1,600,000 $400,000 Income from Son 72,000 -- Cost of Sales (1,000,000) (200,000) Other Expenses (402,400) (104,000) Net Income $269,600 $96,000 Retained Earnings 1/1 708,000 136,000 Dividends (200,000) (64,000) Retained Earnings 31/1 $777,600 $168,000 Balance Sheet at Dec. 31, 2017 Cash $72,000 $60,000 Account Receivable-net 320,000 80,000 Dividends receivables from Son 28,800 --- Note Receivable from Pop -- 20,000 Inventory 380,000 40,000 Investment in Son 878,400 -- Land 260,000 120,000 Buildings-net 680,000 320,000 Equipment- net 520,000 200,000 Total Assets $3,139,200 $840,000 Account payables $341,600 $40,000 Note payable to Son 20,000 --- Dividends payable ---- 32,000 Capital stock, $40 par 2,000,000 600,000 Retained Earnings 777,600 168,000 Total Liabilities & Equity $3,139,200 $840,000