Pam Corporation owns 75 percent of the voting common stock of Sun Corporation, acquired at book value during 2016. Selected information from the accounts of Pam and Sun for 2017 are as follows:

Pam Sun Sales $1,800 $1,000 Cost of sales 980 380 During 2017 Pam sold merchandise to Sun for $100, at a gross profit to Pam of $40. Half of this merchandise remained in Sun’s inventory at December 31, 2017. Sun’s December 31, 2016, inventory included unrealized profit of $8 on goods acquired from Pam.