On January 2, 2020, Pops, Inc. acquired 48,000 shares of Son Corp. at the fair value of $10 per share. On January 2, 2020, Son has 240,000 shares of common stock issued and outstanding. During the year ended December 31, 2020, Son reported net income of $200,000. On December 26, 2020, Son declared and paid a dividend equal to $100,000. On December 31, 2020, the 48,000 shares of Son have a fair value equal to $12 per share.  

1.  Provide the journal entry recorded by Pops on January 2, 2020:

2.  At what amount should the Investment in Son be reported on Pops' December 31, 2020 balance sheet?

3.  For this question only, assume that on January 2, 2020, Pops, Inc. acquired 192,000 shares of Son Corp. at a cost of $10 per share. At what amount should the Investment in Son be reported on Pops' December 31, 2020 balance sheet?

Answer rating: 100% (QA)

1 Journal entry recorded by Pops on January 2 2020 Investment in Son Corp Dr 480000 Cash Cr 480000 E... View the full answer