P4-4 Consolidation workpapers from separate financial statements Pal Corporation acquired a 75 percent interest in Sun Corporation on January 1, 2011, for $360,000 in cash. Financial statements of Pal and Sun Corporations for 2011 are as follows (in thousands): Pal Sun Combined Income and Retained Earnings Statements for the Year Ended December 31 Sales Income from Sun Cost of sales $800 36 $200 (100 Other expenses Net income Add: Retained earnings January 1 Deduct: Dividends Retained earnings December 31 (500) (194) 142 360 (100) $402 $ 118 160 12 190 $ 30 40 20 Balance Sheet at December 31 Cash Accounts receivable-net Dividends receivable from Sun Inventories Note receivable from Pal Land Buildingsnet Equipment-net Investment in Sun Total assets 10 130 340 260 372 100 $1,582 $ 170 10 $420 S 20 Accounts payable Note payable to Sun Dividends payable Capital stock, S10 par Retained earnings Total equities 1,000 300 84 $1,582 $420 REQUIRED: Prepare consolidation workpapers for Pal Corporation and Subsidiary for the year ended December 31, 2011. Only the information provided in the financial statements is available; accordingly, your solution will require some standard assumptions