The separate incomes (which do not include investment income) of Pat Corporation and Sal Corporation, its 80 percent-owned subsidiary, for 2011 were determined as follows (in thousands):

Pat Sal

Sales .......................... $1,600 ........... $400

Less: Cost of sales ............. 800 ............. 160

Gross profit ..................... 800 ............. 240

Other expenses ................ 400 .............. 120

Separate incomes ........... $ 400 ............. $120

During 2011, Pat sold merchandise that cost $80,000 to Sal for $160,000, and at December 31, 2011, half of these inventory items remained unsold by Sal.

REQUIRED

Prepare a consolidated income statement for Pat Corporation and Subsidiary for the year ended December 31, 2011.