Pun Corporation acquired 80% of Set Companys preferred stock for $175,000 and 90% of Sets common stock for $630,000 on July 1, 2011. Sets stockholders equity on December 31, 2011 was as follows (in thousands):

9% preferred stock, cumulative, nonparticipating,

$100 par, call price $105 $200

Common stock, $10 par 500

Paid-in capital in excess of par 40

Retained earnings 160

Total stockholders equity $900

Set had net income of $24,000 in 2010 and $46,000 in 2011, but declared no dividends in either year. Assume that preferred dividends accrue ratably throughout each year and that Sets net assets were fairly valued on July 1, 2015.

REQUIRED:

Determine the account balance of Puns Corporations investment in Sets preferred and common stocks at December 31, 2011 on the basis of a one-line consolidation.

Prepare work paper entries to consolidate the balance sheets of Pun and Set at December 31, 2011.