Pat owns 90,000 shares of Sal's outstanding voting common stock at December 31, 2011. These shares were aquired in two lots as follows:

		Date					Shares			Purch Price
Lot 1		Jan 1, 2010					70000			490000
Lot 2		April 1, 2011					20000			152000
Stockholers Equity:
		2009		2010			2011
$10 Ppreferred stock $100 par, cumulative with no dividends in arrears		100		100			100
Common Stock $5 par		500		500			500
Other paid in capital		50		50			50
Retained Earnings		150		20			240
Total		800		850			890

Sal's Net Income for 2011 is $90,000, earned proportionately throughout the year and its quarterly dividends of $12,500 are declared on March 15, June 15, September 15, and December 15. (Quarterly dividends of $12,500 include dividends on common stock and preferred stock.) There are no Intercompany receivables or payables at Dec 31, 2011. and there have been no Intercompany transactions other than dividends.

Prepare a consolidation work paper for Pat and Subsidiary for 2011.

NAME HERE

PAT CORPORATION AND SUBSIDIARY

P 10-3

CONSOLIDATION WORKSHEET

FOR THE YEAR ENDED DECEMBER 31, 2011

|

|

80%

|

Adjustments & Eliminations

|

Consolidated

|

(in thousands)

|

Pat

|

Sal

|

Debits

Credits

|

Statements

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INCOME STATEMENT

|

|

|

|

|

|

Sales

|

1,233

|

700

|

|

|

1,933

|

Income from Sal

|

68

|

|

|

|

68

|

Cost of sales

|

(610)

|

(400)

|

|

|

(1,010)

|

Other expenses

|

(390)

|

(210)

|

|

|

(600)

|

Preacquisition income

|

|

|

|

|

0

|

Noncontrolling interest share

|

|

|

|

|

0

|

Net income

|

301

|

90

|

|

|

391

|

RETAINED EARNINGS

|

|

|

|

|

|

Retained earnings beg

|

501

|

200

|

|

|

701

|

Net income

|

301

|

90

|

|

|

391

|

Dividends

|

(200)

|

(50)

|

|

|

(250)

|

|

|

|

|

|

|

|

|

|

|

|

|

Retained earnings end

|

602

|

240

|

|

|

842

|

BALANCE SHEET

|

|

|

|

|

|

Cash

|

191

|

50

|

|

|

241

|

Other current assets

|

200

|

300

|

|

|

500

|

Plant assets

|

900

|

600

|

|

|

1,500

|

Investment in Sal

|

711

|

|

|

|

711

|

|

|

|

|

|

|

Goodwill

|

|

|

|

|

0

|

Total assets

|

2,002

|

950

|

|

|

2,952

|

|

|

|

|

|

|

Current liabilities

|

200

|

60

|

|

|

260

|

$10 preferred stock

|

|

100

|

|

|

100

|

Common stock

|

1,200

|

500

|

|

|

1,700

|

Other paid in capital

|

|

50

|

|

|

50

|

Retained earnings

|

602

|

240

|

|

|

842

|

Total equities

|

2,002

|

950

|

|

|

|

Noncontrolling interest - common

|

|

0

|

|

|

|

Noncontrolling interest-preferred

|

|

0

|

0

|

0

|

2,952

|