Pat Corporation acquired an 80 percent interest in Sci Corporation for $480,000 on January 1, 2011, when Sci's stockholders' equity consisted of $400,000 capital stock and $50,000 retained earnings. The excess fair value over book value acquired was assigned to plan assets that were undervalued by $100,000 and to goodwill. The undervalued plant assets has a four-year useful life. ADDITIONAL INFORMATION 1. Pat's account receivable includes $10,000 owed by Sci. 2. Sci mailed its check for $40,000 to Pat on December 30, 2012, in settlement of the advance. 3. A $20,000 dividend was declared by Sci on December 30, 2012, but was not recorded by Pat. 4. Financial statements for Pat and Sci Corporations for 2012 follow(in thousands) Statements of Income and Retained Earnings for the Year Ended December 31 Pat Sci Sales $1,800 $600 Income from Sci 76 ----- Cost of Sales (1200) (300) Operating Expenses (380) (180) Net Income 296 120 Add: Retained earnings, January 1 244 100 Less: Dividends (200) (40) Retained earnings December 31 340 $180 Balance Sheet at December 31 Cash $12 $30 Accounts receivable-net 52 40 Inventories 164 120 Advance to Sci 40 ------- Other current assets 160 10 Land 320 60 Plant assets-net 680 460 Investment in Sci 560 ----- Total assets $1,988 $720 Accounts Payable $48 30 Dividends Payable ------- 20 Other liabilities 200 90 Capital Stock 1,400 400 Retained earnings 340 180 Total liabilities and stockholders' equity $1,988 $720 Required: Prepare consolidation workpapers for Par Corporation and Subsidiary for 2012

Please perform the following steps as shown in class: --Find the Fair Value of Sci --Calculate the total excess --Prepare a schedule to allocate and amortize the total excess --Prepare a Timeline showing the date of acquisition, beginning year of consolidation and ending year of consolidation. --Prepare the four T accounts (Ps Investment in S, Ps Income in S, Noncontrolling Interest, and Noncontrolling Share) --Factual Elimination Entries --Consolidating Entries/Elimination Entries (S, A, I, D, ID, E) --Posting to the worksheet.