Balance sheet

Assets
Current Assets $3,040.00
Land $2,400.00
Building $6,400.00
Equipment $7,360.00
Goodwill $1,920.00

Total Assets $21,120.00

Liabilities & Stockholders' Equity

Current Liabilities $1,760.00
Capital Stock $10,400.00
Additional Paid-in Capital $7,760
Retained Earnings $1,200.00

Total Liabilities & stockholders $21,120.00

Calculation of Goodwill
Consideration (240 * $40) $9,600.00
Less: Net assets
Current assets $1,600.00
Land $1,600.00
Building $1,600.00
Equipment $3,840.00
Current Liabilities $(960.00)
Net assets $7,680.00
Goodwill $1,920.00
 Allocation Schedule
1 Fair value: Son
Assets $8,000,000.00
Liabilities $(3,000,000.00)

Net Assets $5,000,000.00

Fair value Investment

(30% * 6,800,000) $2,040,000.00

Son's net asset & pop's investmen $360,000

(2,404,000 - 1,680,000)

Assets
Cash $60,000
Accounts Recievable $120,000
Inventory $60,000
Land $60,000
Buildings $60,000
Equipment $60,000

Total Assets $420,000

Liabilities
Accounts Payable $60,000
Notes Payable $60,000

Total Liabilities $120,000

Net assets $300,000

Pop's Income from Son

Pop's share of Son's Net Income
(30% * 1,200,000) $360,000

Pop's share of son Dividends

(30% * 600,000) $180,000.00

Pop's Income
(360,000-180,000) $180,000

Balance of Pop's investment

Pop's investment in Son $1,680,000
Pop's share of Son's net income $360,000
Pop's share of dividends $(180,000)

Balance of Pop's investment $1,860,000