Comparative financial statements for Pen Corporation and its subsidiaries, Sir and Tip Corporations, for the year ended December 31, 2016, are as follows (in thousands):

ADDITIONAL INFORMATION
1. Pen acquired its 80 percent interest in Sir Corporation for $420,000 on January 2, 2014, when Sir had capital stock of $400,000 and retained earnings of $100,000. The excess fair value over book value acquired relates to equipment that had a remaining useful life of four years from January 1, 2014.
2. Pen acquired its 50 percent interest in Tip Corporation for $75,000 on July 1, 2014, when Tip's equity consisted of $100,000 capital stock and $20,000 retained earnings. Sir acquired its 40 percent interest in Tip on December 31, 2015, for $68,000, when Tip's capital stock was $100,000 and its retained earnings were $45,000. The difference between fair value and book value acquired is due to goodwill.
3. Although Pen and Sir use the equity method in accounting for their investments, they do not apply the method to intercompany profits or to differences between fair value and book value acquired.
4. At December 31, 2015, the inventory of Sir included inventory items acquired from Pen at a profit of $8,000. This merchandise was sold during 2016.
5. Tip sold merchandise that had cost $30,000 to Sir for $50,000 during 2016. All of this merchandise is held by Sir at December 31, 2016. Sir owes Tip $10,000 on this merchandise.
REQUIRED:
Prepare a consolidation workpaper for the year ended December 31, 2016.

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Pen Sir Tip Income and Retained Earnings Statement for the Year Ended December 31 Sales Income from Sir Income from Tip Cost of sales Other expenses $300 $500 72 $100 12.5 10 (150) (70) 90 160 (40) $210 (60) (15) 25 45 (10) $60 (240) (160) 184.5 115.5 (80) Net income Add: Beginning retained earnings Deduct: Dividends Ending retained earnings $220 Balance Sheet at December 31 Cash Accounts receivable-net Inventories $ 67 70 110 140 508 95 S 36 50 75 425 20 35 115 lant and equipment-net Investment in Sir (80%) Investment in Tip (50%) Investment in Tip (40%) 74 660 Total assets $990 $180 $70 100 600 220 $990 S40 10 400 210 660 Accounts payable Other liabilities $15 Capital stock Retained earnings 100 60 $180 Total equities