P4-17 Prepare consolidated statement of cash flows using the direct method or indirect method Comparative consolidated financial statements for Pam Corporation and its 90 percent–owned subsidiary, Sun Corporation, at and for the years ended December 31 are as follows:

PAM CORPORATION AND SUBSIDIARY COMPARATIVE CONSOLIDATED FINANCIAL STATEMENTS (IN THOUSANDS)
Year 2016 Year 2015 2016–2015 Income and Retained Earnings Statements for the Year Change Sales $ 1,350 $1,200 $ 150 Cost of sales (700) (649) 51 Depreciation expense (102) (102) 0 Other operating expenses (278) (241) 37 Noncontrolling interest share (10) (8) 2 Controlling share of income 260 200 60 Add: Beginning retained earnings 380 260 120 Less: Dividends (80) (80) 0 Ending Retained Earnings $ 560 $ 380 $ 180 Balance Sheets at December 31 Assets Cash $ 111 $ 130 $ (19)
Accounts receivable—net 170 160 10 Inventories 280 240 40 Other current assets 200 162 38 Plant and equipment—net 1,348 1,200 148 Patents 38 39 (1)
Total assets $ 2,147 $1,931 $ 216 Equities Accounts payable $ 170 $ 126 $ 44 Dividends payable 42 34 8 Long-term liabilities 70 92 (22)
Capital stock 1,000 1,000 0 Other paid-in capital 240 240 0 Retained earnings 560 380 180 Noncontrolling interest—10% 65 59 6 Total equities $ 2,147 $1,931 $ 216 REQuIRED: Prepare a consolidated statement of cash flows for Pam Corporation and Subsidiary for the year ended December 31, 2016, using either the indirect method or the direct method. All changes in plant assets are due to asset acquisitions with cash and depreciation. Sun’s net income and dividends for 2016 are $100,000 and $40,000, respectively.