Pop Corporation acquired an 80 percent interest in Sat Corporation on October 1, 2011, for $82,400, equal to 80 percent of the underlying equity of Sat on that date plus $16,000 goodwill (total goodwill is $20,000). Financial statements for Pop and Sat Corporations for 2011 are as follows (in thousands):

ADDITIONAL INFORMATION

1. In November 2011, Pop sold inventory items to Sat for $12,000 at a gross profit of $3,000. One-third of these items remained in Sat's inventory at December 31, 2011, and $6,000 remained unpaid.

2. Sat's dividends were declared in equal amounts on March 15 and November 15, and its income was earned in proportionate amounts throughout each quarter of the year.

3. Pop applies the equity method such that its net income is equal to the controlling share of consolidated net income.

REQUIRED: Prepare a workpaper to consolidate the financial statements of Pop Corporation and Subsidiary for the year ended December 31,2011.

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Pop Sat Combined Income and Retained Earnings Statement for the Year Ended December 31 $ 50 Sales $112 Income from Sat Cost of sales 3.8 (60) (20) Operating expenses Net income (25.1) 30.7 (6) 24 Retained earnings January 1 Dividends 30 20 (10) $ 34 (20) $ 40.7 Retained earnings December 31 Pop Sat Balance Sheet at December 31 $ 5.1 $7 Cash Accounts receivable Note receivable 10.4 17 10 Inventories 16 Plant assets-net Investment in Sat 88 82.2 $220.7 S 15 60 Total assets $110 S 16 Accounts payable Notes payable Capital stock Retained earnings Total equities 25 10 140 50 40.7 34 $220.7 $110