The stockholders' equity of Son Corporation on December 31, 2016, was as follows (in thousands): 15% preferred

Question:

The stockholders' equity of Son on December 31, 2016, was as follows (in thousands):
15% preferred stock, $100 par, cumulative, nonparticipating, with one year's dividends in arrears
$1,000
Common stock, $10 par ................... 2,000
Other paid-in capital ....................... 200
Retained earnings .......................... 300
Total stockholders' equity ............... $3,500
Pop acquired 50 percent of Son's preferred stock for $600,000 and 80 percent of its for $2,000,000 on January 1, 2017. Son reported net income of $400,000 and paid dividends of $300,000 in 2017.
REQUIRED:
1. Prepare the journal entries to record Pop's 50 percent investment in Son's preferred stock.
2. Calculate the excess fair value/book value differential from Pop's 80 percent investment in Son common. Assume the differential is goodwill.
3. Compute Pop's income from Son-preferred for 2017.
4. Compute Pop's income from Son-common for 2017.
5. Calculate the noncontrolling interest in Son that will appear in the consolidated of Pop and Subsidiary on December 31, 2017.
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