Pop Corporation purchased a 75 percent interest in Son Corporation in the open market on January 1,

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Pop Corporation purchased a 75 percent interest in Son Corporation in the open market on January 1, 2017, for $690,000. A summary of Son's stockholders' equity on December 31, 2016 and 2017, is as follows (in thousands):
Pop Corporation purchased a 75 percent interest in Son Corporation

On January 1, 2018, Son Corporation sold an additional 10,000 shares of its own $10 par stock for $30 per share. Pop assigns any excess/deficiency of fair value over book value to goodwill.
REQUIRED:
Compute the following:
1. The underlying book value of the interest in Son held by Pop on December 31, 2017.
2. Pop's percentage ownership interest in Son on January 3, 2018, assuming that Pop purchased the 10,000 additional shares directly from Son.
3. Pop's investment in Son on January 3, 2018, assuming that Pop purchased the additional shares directly from Son.
4. Pop's percentage ownership interest in Son on January 3, 2018, assuming that Son sold the 10,000 additional shares to investors outside the consolidated entity.
5. Pop's investment in Son on January 3, 2018, assuming that Son sold the 10,000 additional shares to investors outside the consolidated entity and no gain or loss is recognized.

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
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Advanced Accounting

ISBN: 978-0134472140

13th edition

Authors: Floyd A. Beams, Joseph H. Anthony, Bruce Bettinghaus, Kenneth Smith

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