Peeves Corporation paid $4,000,000 in cash for an 80 percent interest in Jeeves Corporation on January 1. 2016, when Jeeves' common stock was at $2,500,000 and retained earnings were at $500,000. Com- parative balance sheet data for Peeves and Jeeves Corporations at December 31, 2016, are as follows (in thousands): Assets Cash Receivables-net Dividend receivable Inventories Land Equipment-net Investment in Jeeves Equities Accounts payable Dividend payable Common stock, $10 par Retained earnings Peeves $90 250 40 2,250 800 1.500 4,032 $8.962 $110 5,000 3,852 $8.962 Jeeves $70 300 1,100 550 1.400 $3,420 $120 50 2,500 750 $3,420 In 2016, undervalued inventory of $150,000 was sold, and equipment with a four-year remaining useful life was undervalued by $240,000. Additionally, Peeves' separate net income was at $900,000, while that of Jeeves' was $250,000. Jeeves declared dividends of $50,000, and $50,000 of Peeves' accounts receiv- able is from Jeeves. REQUIRED 1. Prepare consolidated balance sheet workpapers for Peeves Corporation and Subsidiary at December 31. 2016. 2. Calculate the consolidated net income for 2016.