Pan Corporation and its 70 percent-owned subsidiary, Sum Corporation, have pretax operating incomes for 2011 as follows (in thousands):

Pan received $280,000 dividends from Sum during 2011. A previously unrecorded patent from Pan's investment in Sum is being amortized at a rate of $50,000 per year (the same time horizon is used for both book and tax purposes).On January 1, 2011, Pan sold equipment to Sum at a $200,000 gain. Sum is depreciating the equipment at a rate of 20 percent per year. A flat 34 percent tax rate is applicable to both companies.REQUIRED:Prepare a consolidated income statement for Pan Corporation and Subsidiary for 2011. (Assume no deferred tax balance on January 1, 2011.)

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Pan Sum Sales Gain on equipment Cost of sales Other expenses $8,000 200 (5,000) (1,800) $4,000 (2,000) (1,200) $ 800 Pretax income $1,400