Taxable incomes for Pop Corporation and Son Corporation, its 70 percent-owned subsidiary, for 2016 are as follows (in thousands):

ADDITIONAL INFORMATION
1. Pop acquired its interest in Son at a fair value equal to book value on December 31, 2015.
2. Son paid dividends of $80,000 in 2016.
3. Pop sold $180,000 in merchandise to Son during 2016, and there was $20,000 in unrealized profit from the sales at year-end.
4. A flat 34 percent income tax rate is applicable.
5. Pop is eligible for the 80 percent dividends-received deduction.
REQUIRED:
Prepare a consolidation income statement workpaper for Pop Corporation and Subsidiary for 2016.

Transcribed Image Text:

Son Sales $1,000 56 $600 Dividends received Total revenue from Son 1,056 600 500240 160 400 $200 Cost of sales Operating expenses Total deductions Taxable income 156 656 S 400