Workpapers $($year of acquisition, fair value$/$book value differentials, intercom$-$

pany balances$)$

Pik Corporation acquired $80$ percent of Sel Corporation's common stock on January $1,2011,$ for

$$420,000$ cash. The stockholders' equity of Sel at this time consisted of $$300,000$ capital stock and

$$100,000$ retained earnings. The difference between the fair value of Sel and the underlying equity ac$-$

quired in Sel was due to a $$25,000$ undervaluation of Sel's inventory, a $$50,000$ undervaluation of Sel's

equipment, and goodwill.

The undervalued inventory was sold by Sel during $2011,$ and the undervalued equipment had a

remaining useful life of five years. Straight$-$line depreciation is used.

Sel owed Pik $$8,000$ on accounts payable at December $31,2011.$

The separate financial statements of Pik and Sel Corporations at and for the year ended

December $31,2011,$ are as follows $($in thousands$)$:

REQUIRED: Prepare consolidation workpapers for Pik Corporation and Sel at and for the year ended

December $31,2011.$