P8-3 Sale of an interest during accounting period, upstream building sale Piero SAA was a 90 percent-owned subsidiary of Isac SAA acquired for $3,600,000 on January 1, 2014.

The total net assets for Piero SAA at the acquisition date were $3,800,000. The book value identifiable assets and liabilities of Piero SAA is the same with the fair value. The trial balance of both companies for the year ended 2014 is as follows (in thousands):

Debits Isac SAA Piero SAA Cash $900 $400 Accounts receivable 200 700 Inventory 1,640 700 Land 2,100 2,800 Equipment 3,000 1,400 Investment in Piero SAA 2,835 0 Cost of sales 5,800 2,800 Other expenses 400 700 Dividends 200 200 Total $ 17,075 $ 9,700 Credits Accounts payable $1,900 $1,400 Common stock 5,000 2,000 Additional-paid in capital 50 0 Retained Earnings 2,500 1,800 Sales 7,400 4,500 Income from Piero SAA 225 0 Total $ 17,075 $ 9,700 Consolidations—Changes in Ownership Interests 293 294 CHAPTER 8 ADDITIONAL INFORMATION 1. On March 31, 2014, Isac SAA sold its 20 percent of ownership in Piero SAA for $900,000.

2. On July 1, 2013, Piero SAA sold equipment to Isac SAA with a profit of $500,000. The equipment has a remaining useful life of 5 years and the only dividend declared during the year by Piero SAA was on August 1, 2014.

3. Piero SAA income and expenses occurred proportionately during the year.

REQuIRED: Prepare a workpaper to consolidate the financial statement of Isac SAA and Subsidiary for the year ended December 31, 2014.