E 6-4 Journal entries and consolidated income statement (downstream sale of building) Sun is a 90 percent-owned subsidiary of Pam Corporation, acquired at book value several years ago. Comparative separate company income statements for the affiliates for 2016 are as follows: Sun Corporation Pam Corporation $350,000 Sales $750,000 Income from Sun 54,000 Gain on building 15.000 350,000 Income credits 819,000 Cost of sales 500,000 200,000 Operating expenses 150,000 75,000 Income debits 650.000 275,000 Net income $169,000 $ 75,000 On January 5, 2016, Pam sold a building with a 10-year remaining useful life to Sun at a gain of $15,000, Sun paid dividends of $50,000 during 2016. REQUIRED 1. Reconstruct the journal entries made by Pam during 2016 to account for its investment in Sun. Explanations of the journal entries are required. 2. Prepare a consolidated income statement for Pam Corporation and Subsidiary for 2016