Par Corporation acquired an 80 percent interest in Sip Corporation for $180,000 cash on January 1, 2011, when Sip had capital stock of $50,000 and retained earnings of $150,000. The excess of fair value over book value acquired is due to a patent, which is being amortized over five years. Sip purchased its 20 percent interest in Par at book value on January 2, 2011, for $100,000.

Financial statements for the year ended December 31, 2012, are summarized as follows:

ADDITIONAL INFORMATION1. Par's separate earn in s and dividends for 2012 were $60,000 and $20,000, respectively. Sip's separate earnings and dividends in 2012 were $40,000 and $20,000, respectively.2. Sip sold land to an outside interest for $7,000 on January 3, 2012, that it purchased from Par on January 3, 2011, for $4,000. The land had originally cost Par $2,000.REQUIRED: Prepare consolidation workpaper entries and a consolidation workpaper for Par Corporation and Subsidiary at December 31, 2012, using the conventional approach for the mutual holding.

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Par Sip Combined Income and Retained Earnings Statement for the Year Ended December 31 Sales $140,000 28,000 $100,000 Income from Sip Dividend income 4,000 Gain on sale of land 3,000 (60,000) 47,000 180,000 (20,000) $207,000 (80,000) 88,000 405,710 Expenses Net income Add: Beginning retained earnings Deduct: Dividends Retained earnings December 31 (16,000) $477,710 Balance Sheet at December 31 $157,000 Other assets $448,000 109,710 Investment in Sip (80%) Investment in Par (20%) 100,000 $557,710 $ 80,000 477,710 $257,000 $ 50,000 207,000 Total assets Capital stock Retained earnings $557,710 $257,000 Total equities