Form DOn Jan. 1, 2021, Pop acquired 80% interest in Son for SAR 5,000,000, when Son's stockholders'equity consisted of SAR 2,000,000 capital stock, SAR 1,000,000 additional paid in capital, and SAR800,000 retained earnings. On the date that Son became a subsidiary of Pop, Son's assets andliabilities book values and fair values are the same except for the following:Identifiable assets and liabilitiesOvervalued Land, still in use by SonOvervalued Note payable, retired in 2021Overvalued Equipment, has 5 years remaining useful lifeIn thousand230220400Son reports SAR 1,055,000 net income for 2021 and declared dividends of SAR 300,000 Dec. 1,2021.During 2021 Pop Corporation (parent) sells merchandise that it purchased for SAR 300,000 to SonCorporation (subsidiary) for SAR 600,000 and that Son Corporation sold 40 percent of themerchandise to outsiders during the year for SAR 800,000. Also, Pop sold a land that cost SAR1,000,000 to Son for SAR 1,300,000. Son still uses the land. Summary Pop and Son's accountbalances at December 31, 2021, follow (in thousands): Form DOn Jan. 1, 2021, Pop acquired 80% interest in Son for SAR 5,000,000, when Son's stockholders'equity consisted of SAR 2,000,000 capital stock, SAR 1,000,000 additional paid in capital, and SAR800,000 retained earnings. On the date that Son became a subsidiary of Pop, Son's assets andliabilities book values and fair values are the same except for the following:Identifiable assets and liabilitiesOvervalued Land, still in use by SonOvervalued Note payable, retired in 2021Overvalued Equipment, has 5 years remaining useful lifeIn thousand230220400Son reports SAR 1,055,000 net income for 2021 and declared dividends of SAR 300,000 Dec. 1,2021.During 2021 Pop Corporation (parent) sells merchandise that it purchased for SAR 300,000 to SonCorporation (subsidiary) for SAR 600,000 and that Son Corporation sold 40 percent of themerchandise to outsiders during the year for SAR 800,000. Also, Pop sold a land that cost SAR1,000,000 to Son for SAR 1,300,000. Son still uses the land. Summary Pop and Son's accountbalances at December 31, 2021, follow (in thousands):

Adjustment for Excess Amortization of Overvalued Assets:Excess amortization for the overvalued land:…

REQUIRED Prepare workpapers to consolidate the financial statements of Pop Corporation and Subsidiary at and for the year ended December 31, 2021. (Support your answer with proper calculations and related workpaper entries) ** note that you need to make some preliminary computation and find some balances.

REQUIRED Prepare workpapers to consolidate the financial statements of Pop Corporation and Subsidiary at and for the year ended December 31, 2021. (Support your answer with proper calculations and related workpaper entries) ** note that you need to make some preliminary computation and find some balances.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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