P 4-3 Workpapers in year of acquisition (goodwill and intercompany transactions) Pan Corporation acquired a 75 percent interest in Saf Corporation on January 1, 2011. Financial statements of Pan and Saf Corporations for the year 2011 are as follows (in thousands): Pan Saf Combined Income and Retained Earnings Statements for the Year Ended December 5800 S200 27.6 Sales Income from Saf Cost of sales Other expenses Net income Add: Retained earnings January 1 Deduct: Dividends Retained earnings December 31 (500) (194) 133.6 360 (100) S393.6 (100) (52) 48 68 (32) 584 S 106 172 190 10 Balance Sheet at December 31 Cash Accounts receivable pet Dividends receivable from Saf Inventories Note receivable from Pan Land Buildingsnet Equipment-net Investment in Saf Total assets Accounts payable Note payable to Sat Dividends payable Capital stock, $10 par Retained earnings Total equities 130 340 260 363.6 51.373.6 $ 170 10 S 30 40 REQUIRED: Prepare consolidation workpapers for Pan Corporation and 20 Subsidiary for the year ended December 31, 2011. Only the information provided in the 160 financial statements is available: accordingly, 100 your solution will require some standard assumptions. Saf owned unrecorded patents 5420 having a fair value of $112.000, and a useful life of 10 years, $ 20 16 1.000 393.6 $1.573.6 300 84 $420