The separate incomes (which do not include investment income) of Pep Corporation and Shemp Company, its 80%-owned subsidiary, for 2016 were determined as follows (in thousands) Pep S3,200 Shemp $800 Sales Less: Cost of sales Gross profit Less: Other expenses Separate incomes 1,600 480 4 During 2016, Pep sold merchandise that cost $160,000 to Shemp for $320,000, and at December 31, 2016, half of these inventory items remained unsold by Shemp. the two consolidation working paper entries at December 31, 2011 to eliminate the effects 1. Prepare of the intercompany inventory sales assuming the perpetual inventory method is used. (4 points) 2. Prepare a consolidated income statement for Pep Company and Subsidiary for 2016 showing consolidated net income, controlling interest share, and noncontrolling interest share. (6 points)