Financial statements for Pal and Sun Corporations for 2011 are as follows (in thousands):
ADDITIONAL INFORMATION
1. Pal acquired an 80 percent interest in Sun on January 2, 2009, for $290,000, when Sun’s stockholders’ equity consisted of $300,000 capital stock and no retained earnings. The excess of investment fair value over book value of the net assets acquired related 50 percent to undervalued inventories (subsequently sold in 2009) and 50 percent to goodwill.
2. Sun sold equipment to Pal for $25,000 on January 1, 2010, when the equipment had a book value of $10,000 and a five-year remaining useful life (included in plant assets).
3. During 2011, Sun sold land to Pal at a profit of $10,000 (included in plant assets).
4. Pal uses the equity method to account for its investment in Sun.
REQUIRED: Prepare a consolidation workpaper for Pal and Subsidiary for the year ended December 31,2011.