On December 31, 2011, Pen Corporation purchased 80 percent of the stock of Sut Company at book value. The data reported on their separate balance sheets immediately after the acquisition follow. At December 31, 2011, Pen Corporation owes Sut $10,000 on accounts payable. (All amounts are in thousands.)

REQUIRED1. Prepare a consolidated balance sheet for Pen Corporation and Subsidiary at December 31, 2011.2. Compute consolidated net income for 2012 assuming that Pen Corporation reported separate income of $340,000 and Sut Company reported net income of $180,000. (Separate incomes does not include income from the investment inSut.)

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Pen Sut Assets $ 64 $ 36 68 Cash Accounts receivable Inventories Învestment in Sut 90 286 400 112 Equipment-net 760 S1.600 350 $566 Liabilities and Stockholders' Equity Accounts payable Common stock, $20 par Retained earnings $ 66 $ 80 920 300 600 200 $566 $1,600