Son Corporation's outstanding capital stock (and paid in capital) has been $200,000 since the company was organized in 2016. Son's retained earnings account since 2016 is summarized as follows:
Retained Earnings
Dividends December 1, 2016 ....... $20,000 ........... Net income 2016 ........ $50,000
Dividends December 1, 2017 ....... 20,000 ............ Net income 2017 .......... 70,000
Dividends December 1, 2018 ....... 30,000 ........... Net income 2018 .......... 10,000
Dividends December 1, 2019 ....... 40,000 ............ Net income 2019 .......... 60,000
Pop Corporation purchased 75% of Son's outstanding stock on January 1, 2018, for $300,000. During 2019. Pop's income, excluding the investment income from Son, was $90,000.
Required
1. Prepare the journal entries, other than closing entries, on Pop's books to account for its investment in Son during 2019 under the cost method.
2. Determine the balance of Pop's Investment in Son account at December 31, 2019, under the cost method.
3. Prepare the journal entries, other than closing entries, on Pop's books to account for its investment in Son for 2019 under the equity method.
4. Determine the balance of Pop's Investment in Son account at December 31, 2019, under the equity method.
5. Compute consolidated net income for Pop Corporation and subsidiary for 2019?