Allocation schedule and computations (excess cost over fair value) Pop Corporation acquired a 70 percent interest in Son Corporation on April 1, 2016, when it purchased 14,000 of Son's 20,000 outstanding shares in the open market at $13 per share. Additional costs of acquir- ing the shares consisted of $10,000 legal and consulting fees. Son Corporation's balance sheets on January 1 and April 1, 2016, are summarized as follows (in thousands): Cash Inventories Other current assets Land Equipment-net Total assets Accounts payable Other liabilities Capital stock, $5 par Retained earnings January 1 Current earnings Total liabilities and equity January 1 (per books) April 1 (per books) April 1 (fair values) $ 40 $45 $45 35 60 25 30 100 $230 $45 15 100 70 $230 20 30 95 $250 $40 20 100 70 20 $250 2. Calculate Pop's investment income from Son for 2016. 3. Determine the correct balance of Pop's Investment in Son account at December 31, 2016. *888*8*8 REQUIRED 1. Prepare a schedule showing how the difference between Pop's investment cost and book value acquired should be allocated to identifiable and/or unidentifiable assets. 50 $300 ADDITIONAL INFORMATION 1. The overvalued inventory items were sold in September 2016. 2. The undervalued items of equipment had a remaining useful life of four years on April 1, 2016. 3. Son's net income for 2016 was $80,000 ($60,000 from April to December 31, 2016). 4. On December 1, 2016. Son declared dividends of $2 per share, payable on January 10, 2017. 5. Any unidentified assets of Son are not amortized. 20 Stock Investments Investor Accounting and Reporting 83