can you help me with this question please... I'm confused with the calculations... Thank you...

P5-8 Consolidated workpapers (downstream sales) Pan Corporation acquired 100 percent of Sal Corporation's outstanding voting common stock on ary L, 2011. for $060,000 cash. Sal's stockholders' equity on this date consisted of $300.000 canit stock and $300,000 retained earnings. The difference between the fair value of Sal and the under equity acquired in Sal was allocated S30,000 to Sal's undervalued inventory and the remainder to will. The undervalued inventory items were sold by Sal during 2011 Pan made sales of $100,000 to Sal at a gross profit of $40,000 during 2011; during 2012, Pan made sales of $120,000 to Sal at a gross profit of $48,000. One-half the 2011 sales were invente- ried by Sal at year-end 2011, and one-fourth the 2012 sales were inventoried by Sal at year-end 2012. Sal owed Pan $17,000 on account at December 31, 2012. The separate financial statements of Pan and Sal Corporations at and for the year ended December 31, 2012, are summarized as follows: Pan Sal Combined Income and Retained Earnings Statements for the year Ended December 31, 2012 (in thousands) Sales Income from Sal Cost of sales Depreciation expense Other expenses $ 800 $400 108 (400) (110) (192) 206 606 (100) Net income Beginning retained earnings Less: Dividends 100 380 (50) Retained earnings December 31, 2012 72 30 Intercompany Profit Transactions-In Balance Sheet at December 31, 2012 Receivables-net Other assets Buildings-net Ivestment in Sal $ 54 s 37 70 50 150 Total assets Accounts payable Other liabilities Common stock, $10 par Retained earnings Total equities 5 160 90 712 430 I R ED: Prepare workpapers to consolidate the financial statements of Pan Corporation and Subsidi- at and for the year ended December 31, 2012 REO