Palm Company acquired 90% of the voting stocks of Sand Company for $3,600,000 on January 1, 2018. The total net assets for Sand at the acquisition date were $3,800,000. The book value identifiable assets and liabilities of Sand are the same as the fair value. The trial balance of both companies for the year ended 2018 is as follows (in thousands): PAN AND SAL CONSOLIDATION WORKPAPER FOR THE YEAR ENDED DECEMBER 31, 2018 (IN 000) Income Statement Sales Income from Sand Cost of sales Depreciation & Other expenses Eliminations Consolidated Palm Sand Debits Credits Statements $ 7,400 $4,500 750 - 5,800 - 2,800 -400 -700 Net income $1,950 $1,000 Retained Earnings Statement Retained earnings Jan. 1 2,500 1,800 Net income 1,950 1,000 Dividends $ 200 -$200 Retained earnings- Dec. 31 $4,250 $2,600 Balance Sheet Cash 1,100 1,100 Inventory 1,640 700 Plant assets 5,100 4,200 Investment in Sand 3,360 Net income $1,950 $1,000 Retained Earnings Statement Retained earnings Jan. 1 2,500 1,800 Net income 1,950 1,000 Dividends $ 200 -$200 Retained earnings - Dec. 31 $4,250 $2,600 Balance Sheet Cash Inventory Plant assets Investment in Sand 1,100 1,100 1,640 700 5,100 4,200 3,360 Total Assets $ 11,200 $6,000 Accounts payable 1,900 1,400 Common stock 5,050 2,000 Retained earnings 4,250 $2,600 Total liabilities and equities $11,200 $6,000 1. On March 31, 2018, Palm sold 20% of its ownership in Sand for $900,000. 2. On July 1, 2018, Sand sold equipment to Palm, with a profit of $500,000. The equipment has a remaining useful life of 5 years. The only dividend declared during the year by Sand was on August 1, 2018. 3. Palm income and expenses occurred proportionately during the year