Pam Corporation acquired a 75 percent interest in Sun Corporation on January 1, 2016. Financial statements of Pam and Sun Corporations for the year 2016 are as follows (in thousands):

Required:
Prepare consolidation work-papers for Pam Corporation and Subsidiary for the year ended December 31, 2016. Only the information provided in the financial statements is available; accordingly, your solution will require some standard assumptions. Sun owned unrecorded patents having a fair value of $224,000, and a useful life of 10 years?

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Pam Sun Combined Income and Retained Earnings Statements for the Year Ended December 31 $1,600 $400 55.2 Income from Sun Cost of sales Other expenses (1,000) (388) (200) (104) Net income Add: Retained earnings January1 Deduct: Dividends 720 (200) $ 787.2 136 (64) Retained earnings December 31 Balance Sheet at December 31 Cash Accounts receivable-net Dividends receivable from Sun Inventories Note receivable from Pam $ 212 $ 60 80 24 380 260 680 520 727.2 40 20 120 320 200 Buildings-net Equipment-net Investment in Sun Total assets $840 Accounts payable Note payable to Sun Dividends payable $340 $ 40 20 32 600 168 $840 Capital stock, $10 par 2,000 Retained earnings Total equities 787.2 $3,147.2