Problem 3-2 (req. 1 & extra: prepare consolidation entries in general journal format & complete consolidation workpaper on the following page) P2 Allocation schedule for fair value/book value differential and consolidated balance sheet at acquisition Pop Corporation acquired 70 percent of the outstanding common stock of Son Corporation on January 1, 2016, for $350,000 cash. Immediately after this acquisition the balance sheet information for the two companies was as follows (in thousands): Son Book Value Pop Book Value Fair Value $ 40 60 $ 70 160 140 200 220 160 350 $1,300 $ 40 60 60 100 140 80 Assets Cash Receivables-net Inventories Land Buildings-net Equipment-net Investment in Son Total assets Liabilities and Stockholders' Equity Accounts payable Other liabilities Capital stock, $20 par Retained earnings Total equities 100 120 180 60 $480 $ 560 $160 80 $ 180 20 1,000 100 $1,300 $160 100 200 20 $480 REQUIRED 1. Prepare a schedule to assign the difference between the fair value of the investment in Son and the book value of the interest to identifiable and unidentifiable net assets. Problem 3-2- Parent Corporation and Subsidiary Consolidation Workpaper- 1-Jan-16- ($ in thousands) Adjustments/Eliminations- Parent Subsidiary. Consoli- dated Debit Credit 70 Cash Receivables-net- Inventories Land: Buildings-net: Equipment-net Investment in Son 160 140 200 220 160 350 Total Assets 1,300 0 0 Accounts payable- Other liabilities: 180 20 1,000 100 Capital stock Retained earnings- Total Liabilities & Stockholders' Equity 1,300 0 0 Problem 3-2 (req. 1 & extra: prepare consolidation entries in general journal format & complete consolidation workpaper on the following page) P2 Allocation schedule for fair value/book value differential and consolidated balance sheet at acquisition Pop Corporation acquired 70 percent of the outstanding common stock of Son Corporation on January 1, 2016, for $350,000 cash. Immediately after this acquisition the balance sheet information for the two companies was as follows (in thousands): Son Book Value Pop Book Value Fair Value $ 40 60 $ 70 160 140 200 220 160 350 $1,300 $ 40 60 60 100 140 80 Assets Cash Receivables-net Inventories Land Buildings-net Equipment-net Investment in Son Total assets Liabilities and Stockholders' Equity Accounts payable Other liabilities Capital stock, $20 par Retained earnings Total equities 100 120 180 60 $480 $ 560 $160 80 $ 180 20 1,000 100 $1,300 $160 100 200 20 $480 REQUIRED 1. Prepare a schedule to assign the difference between the fair value of the investment in Son and the book value of the interest to identifiable and unidentifiable net assets. Problem 3-2- Parent Corporation and Subsidiary Consolidation Workpaper- 1-Jan-16- ($ in thousands) Adjustments/Eliminations- Parent Subsidiary. Consoli- dated Debit Credit 70 Cash Receivables-net- Inventories Land: Buildings-net: Equipment-net Investment in Son 160 140 200 220 160 350 Total Assets 1,300 0 0 Accounts payable- Other liabilities: 180 20 1,000 100 Capital stock Retained earnings- Total Liabilities & Stockholders' Equity 1,300 0 0