Paque Corporation owns 90% of the common stock of Segal Company. The stock was purchased for $810,000 on January 1, 2022, when Segal Company’s retained earnings were $150,000. Financial data for 2026 are presented here:

The January 1, 2026, inventory of Paque Corporation includes $45,000 of profit recorded by Segal Company on 2025 sales. During 2026, Segal Company made intercompany sales of $300,000 with a markup of 20% of selling price. The ending inventory of Paque Corporation includes goods purchased in 2026 from Segal Company for $75,000. Paque Corporation uses the complete equity method to record its investment in Segal Company.

Required:
A. Prepare the consolidated statements workpaper for the year ended December 31, 2026.
B. Calculate consolidated retained earnings on December 31, 2026, using the analytical or t- account approach.

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Sales Equity in Subsidiary Income Total Revenue Cost of Goods Sold: Beginning Inventory Purchases Cost of Goods Available Less: Ending Inventory Cost of Goods Sold Other Expenses Total Cost and Expense Net Income 1/1 Retained Earnings Net Income Dividends Declared 12/31 Retained Earnings Cash Accounts Receivable Inventory Investment in Segal Company Other Assets Total Assets Paque Corporation $1,650,000 91,125 1,741,125 225,000 1,275,000 1,500,000 210,000 1,290,000 310,500 1,600,500 $ 140,625 798,000 140,625 (150,000) $788,625 $ 93,000 319,500 210,000 833,625 750,000 $2,206,125 Segal Company $ 795,000 795,000 165,000 525,000 690,000 172,500 517,500 206,250 723,750 $ 71,250 180,000 71,250 (60,000) $ 191,250 $ 75,000 168,750 172,500 630,000 $1,046,250