E 5-8 Consolidated income statement with downstream sales The separate incomes (which do not include investment income) of Pat Corporation and Sal Corporation, its 80 percent- owned subsidiary, for 2011 were determined as follows (in thousands): Pat Sal Less: Cost of sales Gross profit Other expenses Separate incomes $1,600 800 800 400 $ 400 $400 160 240 120 $120 During 2011, Pat sold merchandise that cost $80,000 to Sal for $160,000, and at December 31,2011, half of these inventory items remained unsold by Sal. REQUIRED: Prepare a consolidated income statement for Pat Corporation and Subsidiary for the year ended December 31,2011