E 6-7 Consolidated income statement (sale of asset sold upstream 2 years earlier) A summary of the separate income of Pam Corporation and the net income of its 75 percent-owned subsidiary, Sun Corporation, for 2016 is as follows: Sun Pam Sales $125,000 Gain on sale of machinery 2,500 $75,000 $75,000 Cost of good sold (50,000) (32,500) Depreciation expense Other expenses Separate income (excludes investment income) (12,500) (20,000) $ 45,000 $ 25,000 (7,500) (10,000) Sun Corporation sold machinery with a book value of $10,000 to Pam Corporation for $16,250 on January 2, 2014. At the time of the intercompany sale, the machinery had a remaining useful life of five years. Pam uses straight-line depreciation. Pam used the machinery until December 28, 2016, when it was sold to an outside entity for $9,000. REQUIRED: Prepare a consolidated income statement for Pam Corporation and Subsidiary for 2016.