A summary of the assets and equities of Pot Corporation and its 80 percentowned subsidiary, Sea Corporation, at December 31, 2016, is given as follows (in thousands):

	Pot	Sea
Assets	$3,200	$1,400
Investment in Sea (80%)	800
Total assets	$4,000	$1,400
Liabilities	$600	$400
Capital stock	2,400	800
Retained earnings	1,000	200
Total equities	$4,000	$1,400

On January 2, 2017, Sea acquired a 70 percent interest in Toy Corporation for $588,000. Toys net assets of $800,000 were recorded at fair values on this date. The equity of Toy on December 31, 2016, consisted of $600,000 capital stock and $200,000 retained earnings.

Data on operations of the affiliates for 2017 are as follows (in thousands):

	Separate Earnings	Dividends	Unrealized Profit Included in Separate Earnings
Pot	$600	$200	$40
Sea	200	120
Toy	120	40	20

Pot Corporations $40,000 unrealized profit resulted from the sale of land to Toy. Toys unrealized profit is from sales of merchandise items to Sea and is included in Seas inventory at December 31, 2017.

Required

1. Prepare all journal entries required on the books of Pot and Sea to account for their investments for 2017 on an equity basis. The excess of fair value over book value is goodwill.

2. Compute the net incomes of Pot and Sea, and total noncontrolling interest share for 2017.

3. Prepare a schedule showing the assets and equities of Pot, Sea, and Toy on December 31, 2017, assuming liabilities of $600,000, $400,000, and $200,000 for Pot, Sea, and Toy, respectively.