The attached information is attached.

Pan Corporation acquired a 75 percent interest in Saf Corporation on January 1, 2011. Financial statements of Pan and Saf Corporations for the year 2011 are as follows (in thousands):

Combined Income and Retained Earnings Statements for the Year Ended December 31
Sales	$800	$200
Income from Saf	27.6	?
Cost of sales	(500)	(100)
Other expenses	?(194)??	???(52)
?Net income	133.6	48
Add: Retained earnings January 1	360	68
Deduct: Dividends	(100)	(32)
?Retained earnings December 31	$393.6	$? 84
Balance Sheet at December 31
Cash	$???106	$??30
Accounts receivable?net	172	40
Dividends receivable from Saf	12	?
Inventories	190	20
Note receivable from Pan	?	10
Land	130	60
Buildings?net	340	160
Equipment?net	260	100
Investment in Saf	363.6	?
?Total assets	$1,573.6	$420
Accounts payable	$???170	$??20
Note payable to Saf	10	?
Dividends payable	?	16
Capital stock, $10 par	1,000	300
Retained earnings	393.6	84
?Total equities	$1,573.6	$420

Required:

Prepare consolidation workpapers for Pan Corporation and Subsidiary for the year ended December 31, 2011. Only the information provided in the financial statements is available; accordingly, your solution will require some standard assumptions. Saf owned unrecorded patents having a fair value of $112,000, and a useful life of 10 years.

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