Pop Corporation acquired a 70 percent interest in Son Corporation on January 1, 2016, for $420,000 cash, when Son's equity consisted of $300,000 capital stock and $200,000 retained earnings. On July 1, 2017, Pop acquired an additional 10 percent interest in Son for $67,500, to bring its interest in Son to 80 percent. The financial statements of Pop and Son Corporations at and for the year ended December 31, 2017, are as follows (in thousands):

ADDITIONAL INFORMATION
1. The fair value/book value differential from Pop's two purchases of Son was goodwill.
2. Pop Corporation sold inventory items to Son during 2016 for $60,000, at a gross profit of $10,000. During 2017, Pop's sales to Son were $48,000, at a gross profit of $8,000. Half of the 2016 intercompany sales were inventoried by Son at year-end 2016, and three-fourths of the 2017 sales remained unsold by Son at year-end 2017. Son owes Pop $25,000 from 2017 purchases.
3. At year-end 2016, Son purchased land from Pop for $20,000. The cost of this land to Pop was $12,000.
4. Pop sold machinery with a book value of $40,000 to Son for $80,000 on July 8, 2017. The machinery had a five-year useful life at that time. Son uses straight-line depreciation without considering salvage value on the machinery.
5. Pop uses a one-line consolidation in accounting for Son. Both Pop and Son Corporations declared dividends for 2017 in equal amounts in June and December.
REQUIRED:
Prepare a workpaper to consolidate the financial statements of Pop Corporation and Subsidiary for the year ended December 31, 2017.

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Pop Son Combined Income and Retained Earnings Statement for the Year Ended December 31 Sales Income from So Gain on machinery Cost of sales Depreciation expense Other expenses S 900 38 40 (400) (90) (160) $500 (300) (60) (40) Net income Add: Beginning retained earnings Less: Dividends 155 (200) $ 283 250 (50) $300 Retained earnings December 31 Balance Sheet at December 31 Cash Accounts receivable Dividends receivable Inventories Other current items Land Buildings-net Machinery-net Investment in Son S 20 130 20 90 20 50 60 100 510 $1,000 $ 80 30 70 80 40 105 320 Total assets Accounts pavable Dividends payable 100 140 300 283 $1,000 $725 $ 40 25 60 300 300 $725 Other liabilities Capital stock, $10 par Retained earnings Total equities