Poe Corporation purchased a 90 percent interest in Sun Corporation on December 31, 2011, for $5,400,000 cash, when Sun had capital stock of $4,000,000 and retained earnings of $1,000,000. All Sun's assets and liabilities were recorded at fair values when Poe acquired its interest. The excess of fair value over book value is goodwill.

The Poe-Sun affiliation is a vertically integrated merchandising operation, with Sun selling all of its output to Poe Corporation at 140 percent of its cost. Poe sells the merchandise acquired from Sun at 150 percent of its purchase price from Sun. All of Poe's December 31, 2013, and December 31, 2014, inventories of $560,000 and $840,000, respectively, were acquired from Sun. Sun's December 31, 2013, and December 31, 2014, inventories were $1,600,000 each.

Poe's accounts payable at December 31, 2014, includes $200,000 owed to Sun from 2014 purchases.

Comparative financial statements for Poe and Sun Corporations at and for the year ended December 31, 2014, are as follows:

REQUIRED
Prepare a consolidation workpaper for Poe Corporation and Subsidiary for the year ended December 31, 2014.

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Poe Sun Combined Income and Retained Earnings Statement for the Year Ended December 31, 2014 (in thousands) Sales Income from Sun Cost of sales Other expenses 16,380 1,728 (10,920) (3,088) 4,100 2,500 (2,000) 4,600 $11,200 (8,000) (1,200) 2,000 1,400 (1,000) $ 2,400 Net income Add: Beginning retained earnings Deduct: Dividends Retained earnings December 31, 2014 Balance Sheet at December 31, 2014 Cash Inventory Other current assets Plant assets -net Investment in San $ 1,516 840 1,200 6,000 6,444 $16,000 $ 3.400 8,000 4,600 $1,000 1,600 400 6,000 Total assets Current liabilities $9,000 $2,600 4,000 2.400 $ 9,000 Capital stock Retained earnings Total equities