Using partial equity method ..

working paper entries for consolidation is required

Pop Corporation acquired an 80 percent interest in Son Corporation for $240,000 on January 1, 2016, when Son's stockholders' equity consisted of $200,000 capital stock and $25,000 retained earnings. The excess fair value over book value acquired was assigned to plant assets that were undervalued by $50,000 and to goodwill. The undervalued plant assets had a four-year useful life. ADDITIONAL INFORMATION 1. Pop's account receivable includes $5,000 owed by Son. 2. Son mailed its check for $20,000 to Pop on December 30, 2017, in settlement of the advance. 3. A $10,000 dividend was declared by Son on December 30, 2017, but was not recorded by Pop. 4. Financial statements for Pop and Son Corporations for 2017 follow (in thousands): 1 Pop Son Statements of Income and Retained Earnings for the Year Ended December 31 Sales $ 900 $300 Income from Son 38 Cost of sales (600) (150) Operating expenses (190) (90) Net Income 148 60 Add: Retained earnings January 1 122 50 Less: Dividends (100) (20) Retained earnings December 31 $ 170 $ 90 Balance Sheet at December 31 Cash $ 6 $ 15 Accounts receivable-net 26 20 Inventories 82 60 Advance to Son 20 Other current assets 80 5 Land 160 30 Plant assetsnet 340 Investment in Son 280 Total assets S 994 $360 Accounts payable $ 24 $ 15 Dividends payable 10 Other liabilities 45 Capital stock 700 200 Retained earnings 170 90 Total liabilities and stockholders' equity $ 994 $360 REQUIRED: Using the Incomplete Equity method, prepare consolidation workpaper entries, necessary calculations and consolidated statements for Pop Corporation and Subsidiary for 2017 230 100 2