Pam Corporation acquired a 90 percent interest in Sun Corporation on January 1, 2016, for $540,000, at which time Sun's capital stock and retained earnings were $300,000 and $180,000, respectively. The entire fair value/book value differential is goodwill. Financial statements for Pam and Sun for 2017 are as follows (in thousands):

ADDITIONAL INFORMATION
1. Pam sold inventory items to Sun for $120,000 during 2016 and $144,000 during 2017. Sun's inventories at December 31, 2016 and 2017, included unrealized profits of $20,000 and $24,000, respectively.
2. On July 1, 2016, Pam sold machinery with a book value of $56,000 to Sun for $70,000. The machinery had a useful life of 3.5 years at the time of sale, and straight-line depreciation is used.
3. During 2017, Pam sold land with a book value of $30,000 to Sun for $40,000.
4. Pam's accounts receivable on December 31, 2017, includes $20,000 due from Sun.
5. Pam uses the equity method for its 90 percent interest in Sun.
REQUIRED:
Prepare a consolidation workpaper for Pam Corporation and Subsidiary for the year ended December 31, 2017.

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Sun Combined Income and Retained Earnings Statement for the Year Ended December 31, 2017 Sales Income from Sun Gain on land Cost of sales Operating expenses $ 900 $380 10 (400) Net income Add: Retained earnings January 1 Less: Dividends (300) $ 468 Retained earnings, December 31 Balance Sheet at December 31, 2017 $ 266 28 Accounts receivable Dividends receivable Inventories 120 160 Buildings-net Machinery-net Inve stment in Sun Accounts payable Dividends payable Other liabilities Capital stock $ 400 $100 1,600