Par Corporation acquired an 80 percent interest in Sam Corporation common stock for $240,000 on January 1, 2010, when Sam's stockholders' equity consisted of $200,000 common stock, $100,000 preferred stock, and $25,000 retained earnings. The excess was due to goodwill.

Intercompany sales of inventory items from Par to Sam were $50,000 in 2010 and $60,000 in 2011. The cost of these items to Par was 60 percent of the selling price to Sam, and Sam inventoried $30,000 of the intercompany sales items at December 31, 2010, and $40,000 at December 31, 2011. Intercompany receivables and payables from these sales were $10,000 at December 31, 2010, and $5,000 at December 31, 2011.

Sam sold land that cost $10,000 to Par for $20,000 during 2010. During 2011, Par resold the land outside the consolidated entity for $30,000.

On July 1, 2011, Par purchased all of Sam's bonds payable in the open market for $91,000.

These bonds were issued at par, have interest payment dates of June 30 and December 31, and mature on June 30, 2014.

Sam declared and paid dividends of $10,000 on its cumulative preferred stock and $10,000 on its common stock in each of the years 2010 and 2011.

Financial statements for Par and Sam Corporations at and for the year ended December 31, 2011, are summarized as follows (in thousands):

REQUIRED: Prepare a consolidation workpaper for Par Corporation and Subsidiary for the year ended December 31,2011.

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Par Sam Combined Income and Retained Earnings Statement for the Year Ended December 31 Sales $ 900 $ 300 Gain on land 10 6.5 Interest income Income from Sam 50 (600) (208.5) Cost of sales (140) (90) (10) 60 Operating expenses Interest expense Net income Add: Beginning retained earnings Deduct: Dividends Retained earnings December 31 158 132 50 (100) $ 190 (20) $ 90 Balance Sheet at December 31 $ 15 Cash 5.5 Accounts receivable 26 20 Inventories 80 60 Other current assets 100 Land 160 268 30 420 Plant and equipment-net Investment in Sam-bonds 92.5 Investment in Sam-stock 282 $1,014 $ 550 Total assets Accounts payable 10% bonds payable Other liabilities 10% preferred stock Common stock $ 24 $ 15 100 100 45 100 700 200 Retained earnings Total equities 190 90 $1,014 $ 550