A summary of the separate income of Pam Corporation and the net income of its 75 percent-owned subsidiary, Sun Corporation, for 2016 is as follows:

Sun Corporation sold machinery with a book value of $10,000 to Pam Corporation for $16,250 on January 2, 2014. At the time of the intercompany sale, the machinery had a remaining useful life of five years. Pam uses straight-line depreciation. Pam used the machinery until December 28, 2016, when it was sold to an outside entity for $9,000.
REQUIRED:
Prepare a consolidated income statement for Pam Corporation and Subsidiary for 2016.

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Pam Sun Sales Gain on sale of machinery Cost of good sold Depreciation expense Other expenses $125,000 $75,000 2,500 (12,500) n,on) $ 45,000 (32,500) (7,500) 1O,00) Separate income excludes investment income) 寧75,4 )