Pam Company acquired an 80 percent interest in Sun Corporation at book value equal to fair value on January 1, 2016. During the year, Sun sold $50,000 inventory items to Pam, and at December 31, 2016, unrealized profits amounted to $15,000. Separate incomes of Pam and Sun for 2016 were $250,000 and $150,000, respectively.
REQUIRED
1. Determine consolidated net income for Pam Company and Subsidiary under the parent-company theory of consolidation.
2. Determine total consolidated income for Pam Company and Subsidiary, income to controlling stockholders, and income to noncontrolling stockholders under the entity theory of consolidation.