cash. The stockholders' equity of Sel at this time consisted of $$150,000$ capital stock and

$$50,(0)(0)$ retained earnings. The difference between the fair value of Sel and the underlying equity

acyuited in Sel was due to a $$12,500$ undervaluation of Sel's inventory, a $$25,000$ undervaluation of

Sel's equipment, and goodwill.

The undervalued inventory items were sold by Sel during $2011,$ and the undervalued equip$-$

ment had a remaining useful life of five years. Straight$-$line depreciation is used.

Sel owed Pik $$4,000$ on accounts payable at December $31,2011.$

The separate financial statements of Pik and Sel Corporations at and for the year ended

December $31,2011,$ are as follows $($in thousands$)$:

Total equities

Prepare consolidation workpapers for Pik Corporation and Sel at and for the year ende