Pal Corporation acquired a 75 percent interest in Sun Corporation on January 1, 2011, for $360,000 in cash. Financial statements of Pal and Sun Corporations for 2011 are as follows (in thousands):

REQUIRED: Prepare consolidation workpapers for Pal Corporation and Subsidiary for the year ended December 31, 2011. Only the information provided in the financial statements is available; accordingly, your solution will require some standardassumptions.

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Pal Sun Combined Income and Retained Earnings Statements for the Year Ended December 31 Sales $800 $200 Income from Sun Cost of sales 36 (500) (194) 142 (100) Other expenses Net income Add: Retained earnings January 1 Deduct: Dividends (52) 48 360 (100) 68 (32) Retained earnings December 31 $402 S 84 Balance Sheet at December 31 Cash $ 118 $ 30 Accounts receivable-net Dividends receivable from Sun 160 12 40 Inventories Note receivable from Pal Land Buildings-net Equipment-net 190 20 10 130 340 60 160 260 372 100 Investment in Sun Total assets $1,582 $420 $ 170 $ 20 Accounts payable Note payable to Sun Dividends payable Capital stock, $10 par Retained earnings Total equities 10 16 1,000 402 300 84 $1,582 $420