Prepare an allocation schedule; compute income and the investment balance Pop Corporation paid $1,680,000 for a 30 percent interest in Son Corporations outstanding voting stock on January 1, 2016. The book values and fair values of Sons assets and liabilities on January 1, along with amortization data, are as follows (in thousands): Cash Accounts receivablenet Inventories (sold in 2016) Other current assets Land Buildingsnet (10-year remaining life) Equipmentnet (7-year remaining life) Total assets Accounts payable Other current liabilities Bonds payable (due January 1, 2021) Capital stock, $10 par Retained earnings Total equities Book Value Fair Value $ 400 700 1,000 200 900 1,500 1,200 $5,900 $ 800 200 1,000 3,000 900 $5,900 Son Corporation reported net income of $1,200,000 for 2016 and paid dividends of $600,000. REQUIRED 1. Prepare a schedule to allocate the investment fair values/book value differentials relating to Pops invest-ment in Son. 2. Calculate Pops income from Son for 2016. 3. Determine the balance of Pops Investment in Son account at December 31, 2016.

P2-5 Prepare an allocation schedule; compute income and the investment balance Pop Corporation paid $1,680,000 for a 30 percent interest in Son Corporation's outstanding voting stock on January 1, 2016. The book values and fair values of Sons assets and liabilities on January 1, along with amortization data, are as follows (in thousands): Book Value Cash Accounts receivablenet Inventories (sold in 2016) Other current assets Land Buildingsnet (10-year remaining life) Equipment-net (7-year remaining life) Total assets Accounts payable Other current liabilities Bonds payable (due January 1, 2021) Capital stock, $10 par Retained earnings Total equities $ 400 700 1,000 200 900 1,500 1,200 $5,900 Fair Value $ 400 700 1,200 200 1,700 2,000 500 $6,700 $ 800 200 1,100 $ 800 200 1,000 3,000 900 $5,900 Son Corporation reported net income of $1,200,000 for 2016 and paid dividends of $600,000. REQUIRED 1. Prepare a schedule to allocate the investment fair values/book value differentials relating to Pop's invest- ment in Son. 2. Calculate Pop's income from Son for 2016. 3. Determine the balance of Pop's Investment in Son account at December 31, 2016