Problem 4 (21.25 Points) The balance sheet of Pop Corporation and Son Corporation on December 31,...

 

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Problem 4 (21.25 Points) The balance sheet of Pop Corporation and Son Corporation on December 31, 2016, one year after affiliation, contain the following: Current assets Cash Total plant assets Investment in Son Total assets Accounts receivable Dividend receivable Other current assets Total current assets Plant assets Less: Accumulated depreciation Separate Balance Sheets December 31, 2016 Assets Currents liabilities Accounts payable Liabilites and Stockholder' Equity Other current liablities Dividend payable Total current liabilities Stockholders' equity Capital stock Retained earnings Total stockholders's equity Total liabilities and stockholders's equity Pop $ 55,000 $ 88,000 Son 30,000 20,000 14,000 41,000 198,000 150,000 100,000 (40,000) (26,000) 110,000 74,000 104,000 $412,000 $ 160,000 100,000 36,000 86,000 $ 60.000 $ 30,000 40,000 10,000 20,000 60,000 200,000 60,000 112,000 40,000 312,000 100,000 $412,000 $160,000 Instructions a. Prepare the consolidated balance sheet after date of acquisition under each of the following assumptions. 1. Pop acquired 70% interest of Son for $90,000 on January 1, 2016, when Son's stockholders' equity at book value was $120,000. 2. The accounts payable of Son include $10,000 owed to Pop. 3. During 2016 Son had income of $40,000 and declared $20,000 in dividends. b. Prepare the journal entry to record the Adjustments and elimination. Problem 4 (21.25 Points) The balance sheet of Pop Corporation and Son Corporation on December 31, 2016, one year after affiliation, contain the following: Current assets Cash Total plant assets Investment in Son Total assets Accounts receivable Dividend receivable Other current assets Total current assets Plant assets Less: Accumulated depreciation Separate Balance Sheets December 31, 2016 Assets Currents liabilities Accounts payable Liabilites and Stockholder' Equity Other current liablities Dividend payable Total current liabilities Stockholders' equity Capital stock Retained earnings Total stockholders's equity Total liabilities and stockholders's equity Pop $ 55,000 $ 88,000 Son 30,000 20,000 14,000 41,000 198,000 150,000 100,000 (40,000) (26,000) 110,000 74,000 104,000 $412,000 $ 160,000 100,000 36,000 86,000 $ 60.000 $ 30,000 40,000 10,000 20,000 60,000 200,000 60,000 112,000 40,000 312,000 100,000 $412,000 $160,000 Instructions a. Prepare the consolidated balance sheet after date of acquisition under each of the following assumptions. 1. Pop acquired 70% interest of Son for $90,000 on January 1, 2016, when Son's stockholders' equity at book value was $120,000. 2. The accounts payable of Son include $10,000 owed to Pop. 3. During 2016 Son had income of $40,000 and declared $20,000 in dividends. b. Prepare the journal entry to record the Adjustments and elimination.

Answer rating: 100% (QA)

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