On January 1, 2010, Powell Company purchased 80% of the common stock of Southern Company for $400,000. Southern Company reported common stock of $200,000 ($10 par value), other contributed capital of $60,000, and retained earnings of $120,000 on this date. The difference between implied value and the book value interest acquired is attributable to the under-valuation of land held by Southern Company. Southern Company reported net income for 2010 of $100,000. During 2010 Southern Company declared and paid a 20% stock dividend and a $24,000 cash dividend. Southern Company stock had a market value of $30 per share on the date the stock dividend was declared. Powell Company uses the cost method to account for its investment in Southern Company.

Required:

C. Prepare the workpaper entry to establish reciprocity in the 2011 consolidated statements workpaper.