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):

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 10years.

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Pan Saf Balance Sheet at December 31 Cash $ 106 $ 30 Accounts receivable-net Dividends receivable from Saf 172 12 40 Inventories Note receivable from Pan Land 190 10 130 340 60 160 Buildings-net Equipment-net Investment in Saf 260 363.6 100 $1,573.6 Total assets $420 $ 170 $ 20 Accounts payable Note payable to Saf Dividends payable Capital stock, $10 par Retained earnings 10 16 1,000 393.6 300 84 $1.573.6 $420 Total equities