Comparative financial statements for Pandu Corporation and its subsidiaries, Sakti and Kunthi Corporations, at December 31, 2016, are as follows (in thousands): Pandu Sakti Kunthi Income and Retained Earnings Statement for the Year Ended December 31 Sales $525 $400 $150 Income from Sakti 135 35 (300) (125) Income from Kunthi 10 - Cost of sales Other expenses Net income (200) (60) 150 (75) (25) 270 50 Add: Beginning retained earnings 450 225 200 (20) $355 Deduct: Dividends (60) $660 (20) $230 Ending retained earnings Balance Sheet at December 31 Cash $327 $171 $85 Accounts receivable-net 80 25 35 Inventories 125 100 80 Equipment-net Investment in Sakti (90%) Investment in Kunthi (70%) Investment in Kunthi (20%) Total assets 500 325 300 739 429 - 59 $2,200 $680 $500 $140 $15 $10 Accounts payable Other liabilities 100 10 10 Capital stock Retained earnings Total equities 1,300 300 250 660 355 230 $2,200 $680 $500 ADDITIONAL INFORMATION 1. Pandu Corporation acquired its 90 percent interest in Sakti Corporation for $450,000 on January 1, 2014, when Sakti's common stock and retained earnings were $300,000 and $100,000, respectively. The excess of fair value over book value was allocated to goodwill. 2. Pandu Corporation acquired its 70 percent interest in Kunthi Corporation for $280,000 on January 2, 2014, when Kunthi's common stock and retained earnings were $250,000 and S100,000, respectively. The excess of fair value over book value was related to equipment with a five-year remaining useful life. 3. Sakti Corporation acquired its 20 percent interest in Kunthi Corporation for $25,000 on January 1, 2015, when Kunthi's common stock and retained earnings were $250,000 and $150,000, respectively. 4. Pandu's ending balance of inventory at December 31, 2015, includes unrealized profits of $10,000 from Sakti. 5. Sakti sold merchandise that cost $20,000 for $30,000 to Kunthi in 2016. 6. Pandu and Sakti did not employ the equity method for the intercompany transaction, and an excess of fair value over book value was acquired. Both corporations employed only the equity method for their investments. REQUIRED: Prepare a consolidation workpaper for the year ended December 31, 2016.