Pal Corporation acquired 70 percent of the outstanding voting stock of Sal Corporation for $182,000

cash on January 1, 2011, when Sals stockholders equity was $260,000. All the assets and liabilities of

Sal were stated at fair values (equal to book values) when Pal acquired its 70 percent interest.

REQUIRED 1. Prepare consolidation workpapers for Pal Corporation and Subsidiary for 2011. 2. Prepare a consolidated income statement and a consolidated balance sheet for Pal Corporation and Subsidiary.