The pretax accounting incomes of Pam Corporation and its 100 percent–owned subsidiary, Sun Company, for 2016 are as follows (in thousands):

Pam Sun Sales $4,000 $2,000 Gain on land 800 —

Total revenue 4,800 2,000 Cost of sales 2,000 1,200 Gross profit 2,800 800 Operating expenses 1,600 400 Pretax accounting income $ 1,200 $ 400 374 CHAPTER 10