Pay Corporation acquired a 75 percent interest in Sue Corporation for $1,200,000 on January 1, 2011, when Sue's equity consisted of $600,000 capital stock and $200,000 retained earnings. The fair values of Sue's assets and liabilities were equal to book values on this date, and goodwill is not amortized. Pay uses the equity metod of accounting for Sue. During 2011, Pay sold inventory items to Sue for $320,000, and at December 31, 2011, Sue's inventory included items on which there were $40,000 unrealized profits. During 2012, Pay sold inventory items to Sue for $520,000, and at December 31, 2012, Sue's inventory included items on which there were $80,000 unrealized profits. On December 31, 2012, Sue owed Pay $60,000 on account for merchandise purchases. the financial statements of Pay and Sue Corporations at and for the year ended December 31, 2012, are summarized as follows(in thousands):

Combined Income and Retained Earnings Statements for the year ended December 31, 2012	Pay	Sue
Sales	$2,400	$1,600
Income from Sue	410	0
Cost of Sales	(1080)	(840)
Operating Expenses	(580)	(160)
Net Income	1150	600
Beginning retained earnings	730	360
Deduct: Dividends	(600)	(200)
Retained Earnings December 31, 2012	$1,280	$760
Balance sheet
Cash	$340	$120
Accounts Receivable	660	400
Dividends Receivable	60	0
Inventories	240	320
Land	320	200
Buildings-net	920	400
Equipment-net	800	560
Investment in Sue	1540	0
Total Assets	$4,880	$2,000
Accounts Payable	900	400
Dividends Payable	280	80
Other Liabilities	620	160
Common stock,$10 par	1,800	600
Retained Earnings	1,280	760
Total Equities	$4,880	$2,000

Required: Prepare consolidation workpapers for Pay Corporation and Subsidiary for the year ended December 31, 2012