Pam Corporation acquired a 90 percent interest in Sun Corporation in a taxable transaction on January 1, 2016, for $900,000, when Sun had $500,000 capital stock and $400,000 retained earnings. The $100,000 excess cost over book value is due to goodwill. Pam and Sun are an affiliated group for tax purposes.
During 2016, Pam sold land to Sun at a $20,000 profit. Sun still holds the land. Sun paid dividends of $50,000. A flat 34 percent tax rate applies to Pam and Sun. Income statements for Pam and Sun, and a consolidated income statement for Pam and Subsidiary, are summarized as follows:

REQUIRED:
Reconstruct all the workpaper entries needed to consolidate the financial statements of Pam Corporation and Subsidiary for 2016.

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Pam Sun Consolidated 800,000 20,000 36,430 (400,000) (150,000) (85,000) Sales $200,000 $1,000,000 Ga in on sale of land Income from Sun Cost of sales Other expenses Income tax expense Noncontrolling interest share (75,000) (30,000) (32,300) (475,000) (180,000) (117,300) (6.270) $ 221,430 Net income S 221,430 62,700