Financial statements for Par Corporation and its 90 percent-owned subsidiary, Sal Corporation, for 2012 are summarized as follows (in thousands):

Par Corporation acquired its interest in Sal at book value during 2011, when the fair values of Sals assets and liabilities were equal to recorded book values.

Additional informations:

1. Intercompany sales of merchandise between the two affiliates totalled $40,000 during 2012. All intercompany balances have been paid except for $20,000 in transit from Sal to Par at December 31, 2012.

2. Unrealized profits in Sals inventories of merchandise acquired from Par were $10,000 at December 31, 2011, and $17,000 at December 31, 2012.

3. Sal sold equipment with a six-year remaining useful life to Par on Jan. 2, 2010, at a gain of $30,000. The equipment is still in use by Par.

4. Par sold a plant to Sal on July 1, 2012. The land was sold at a gain of $10,000 & the building, which had a remaining useful life of 10 years, at a gain of $20,000.00

5. Sal purchased $100,000 par of Par 10 percent bonds in the open market for $94,000 plus $5,000 accrued interest on December 31, 2012. Interest is paid semiannually on January 1 and July 1, and the bonds mature on January 1, 2017.

Required: Prepare a consolidation workpaper for Par Corporation and Subsidiary for the year ended
December 31, 2012.

Par Sal 90% 699.00 500.00 30.00 64.50 350.00 300.00 40.00 76.00 Income Statement data in (000) Sales Gain on Land/Build Income from Sal Cost of sales Depreciation expense Interest expense Other expense Net Income Add: Beginning RE Deduct:Dividends Reta Earnings 31 20.00 46.00 301.50 150.00 60.00 100.00 100.00 80.00 120.00 100.00 51. 97.00 81.00 5.00 30.00 50.00 40.00 80.00 90.00 150.00 70.00 180.00 140.00 90.00 Balance Sheet Cash Bond interest receivable Other receivables Inventories Land Buildings - net Equipment - net Investment in Sal stock Investment in Par bonds Total Assets Accounts payable Bond interest payable 10% bonds payable Common stock Retained earnings Total Liabiities & Equity 414.50 1011.50 94.00 600.00 80.00 50.00 10.00 200.00 400.00 351.50 1011.50 400.00 120.00 600.00 10 17 Input data Intercompany sales Cash in transit Gain on land sale Gain on building sale Bond market value Bond Par value Accumulated Depreciation - Equipment Accumulated Depreciation - Building 40 Unrealized profit Inventory begin. 20 Unrealized profit Inventory end. 10 Gain on equipment sale 20 Accrued interest on bonds 94 Controlling interest 30 5 90% 100 15 1 Par Sal 90% 699.00 500.00 30.00 64.50 350.00 300.00 40.00 76.00 Income Statement data in (000) Sales Gain on Land/Build Income from Sal Cost of sales Depreciation expense Interest expense Other expense Net Income Add: Beginning RE Deduct:Dividends Reta Earnings 31 20.00 46.00 301.50 150.00 60.00 100.00 100.00 80.00 120.00 100.00 51. 97.00 81.00 5.00 30.00 50.00 40.00 80.00 90.00 150.00 70.00 180.00 140.00 90.00 Balance Sheet Cash Bond interest receivable Other receivables Inventories Land Buildings - net Equipment - net Investment in Sal stock Investment in Par bonds Total Assets Accounts payable Bond interest payable 10% bonds payable Common stock Retained earnings Total Liabiities & Equity 414.50 1011.50 94.00 600.00 80.00 50.00 10.00 200.00 400.00 351.50 1011.50 400.00 120.00 600.00 10 17 Input data Intercompany sales Cash in transit Gain on land sale Gain on building sale Bond market value Bond Par value Accumulated Depreciation - Equipment Accumulated Depreciation - Building 40 Unrealized profit Inventory begin. 20 Unrealized profit Inventory end. 10 Gain on equipment sale 20 Accrued interest on bonds 94 Controlling interest 30 5 90% 100 15 1