P 11-11 Workpaper for proportionate consolidation (joint venture)

Pop Corporation owns a 40 percent interest in Son Company, a joint venture that is organized as an undivided interest. In its separate financial statements, Pop accounts for Son under the equity method, but for reporting purposes, the proportionate consolidation method is used.

Separate financial statements of Pop and Son at and for the year ended December 31, 2016, are summarized as follows (in thousands):

Pop Corporation Son Company Combined Income and Retained Earnings Statements for the Year Ended December 31, 2016 Sales $ 800 $300 Income from Son 20 —

Cost of sales (400) (150)

Depreciation expense (100) (40)

Other expenses (120) (60)

Net income 200 50 Beginning retained earnings 300 —

Beginning venture equity — 250 Dividends (100) —

Retained earnings/venture equity $ 400 $300 Balance Sheets at December 31, 2016 Cash $ 100 $ 50 Receivables—net 130 30 Inventories 110 40 Land 140 60 Buildings—net 200 100 Equipment—net 300 180 Investment in Son 120 —

Total assets $1,100 $460 Accounts payable $ 120 $100 Other liabilities 80 60 Common stock, $10 par 500 —

Retained earnings 400 —

Venture equity — 300 Total equities $1,100 $460 REQuIRED: Prepare a workpaper for a proportionate consolidation of the financial statements of Pop Corporation and Son Company at and for the year ended December 31, 2016.