Please answer all questions on a Microsoft Excel spreadsheet ONLY and show calculations.

P 10-3 [Preferred stock] Consolidation workpaper (subsidiary preferred stock, equity method, mid-year purchase) Financial statements for Pat and Sal Corporations for 2011 are summarized as follows (in thousands): Pat Sal Combined Income and Retained Earnings Statements for the Year Ended December 31 Sales $1,233 $700 Income from Sal Cost of sales (610) (400) Other expenses (390) (210) Net income 301 Add: Retained earnings January 1 Less: Dividends (200) (50) Retained earnings December 31 $ 602 $240 68 90 200 501 Subsidiary Preferred Stock, Consolidated Earnings per Share, and Consolidated Income Taxation 351 Pat Sal $ 191 200 900 711 $2,002 $ 50 300 600 Balance Sheet at December 31 Cash Other current assets Plant assets-net Investment in Sal Total assets Current liabilities $10 preferred stock Common stock Other paid-in capital Retained earnings Total equities $ 200 1,200 $950 $ 60 100 500 50 240 $950 602 $2,002 Pat owns 90,000 shares of Sal's outstanding voting common stock at December 31, 2011. These shares were acquired in two lots as follows: Date Shares Purchase Price Lot 1 January 1, 2010 70,000 $490,000 Lot 2 April 1, 2011 20,000 152,000 The stockholders' equity of Sal at year-end 2009, 2010, and 2011 was as follows (in thousands): December 31 2009 2010 2011 $10 preferred stock, $100 par, cumulative $100 $100 $100 with no dividends in arrears Common stock, $5 par 500 500 500 Other paid-in capital 50 50 Retained earnings 150 200 240 Total stockholders' equity $800 $850 $890 50 Sal's net income for 2011 is $90,000, earned proportionately throughout the year, and its quar- terly dividends of $12,500 are declared on March 15, June 15, September 15, and December 15. (Quarterly dividends of $12,500 include dividends on common stock and preferred stock.) There are no intercompany receivables or payables at December 31, 2011, and there have been no inter- company transactions other than dividends. REQUIRED: Prepare a consolidation workpaper for Pat and Subsidiary for 2011. NAME HERE P 10-3 PAT CORPORATION AND SUBSIDIARY CONSOLIDATION WORKSHEET FOR THE YEAR ENDED DECEMBER 31, 2011 80% | Adjustments & Eliminations Pat Sal Debits Credits Consolidated Statements 1,233 700 68 I (610) (390) (400) (210) (in thousands) INCOME STATEMENT Sales Income from Sal Cost of sales Other expenses Preacquisition income Noncontrolling interest sha Net income RETAINED EARNINGS Retained earnings beg Net income Dividends 1,933 68 (1,010) (600) 01 0 391 301 90 701 501 301 (200) 200 90 (50) 391 (250) 602 240 842 241 Retained eamings end BALANCE SHEET Cash Other current assets Plant assets Investment in Sal 50 300 191 200 900 711 600 500 1,500 7111 I I Goodwill Total assets 0 2,952 2,002 950 200 1,200 Current liabilities $10 preferred stock Common stock Other paid in capital Retained earings Total equities Noncontrolling interest - common 60 100 500 50 240 950 260 100 1,700 50 | 842 602 2,002 0 1 Noncontrolling interest-preferred 0 0 2,952