The balance of Pops investment in Son account at 12/31/17, was $436,000, consisting of 80% of Sons $500,000 stockholders equity on that date and $36,000 goodwill.

On 5/1/18, Pop sold a 20% interest in Son (one-fourth of its holdings) for $130,000. During 2018, Son had net income of $150,000, and on 7/1/18, Son declared dividends of $80,000.

Solve using both the actual date of sale assumption and the beginning of the year sale assumption.

1. Determine the gain or loss on sale of the 20% interest.

2. Calculate Pops income from Son for 2018.

3. Determine the balance of Pops Investment in Son account at 12/31/18.