Check my work On January 1, 2020, Mcllroy, Inc., acquired a 60 percent interest in the common stock of Stinson, Inc., for $334,200. Stinson's book value on that date consisted of common stock of $100,000 and retained earnings of $197,600. Also, the acquisition-date fair value of the 40 percent noncontrolling interest was $222,800. The subsidiary held patents (with a 10-year remaining life) that were undervalued within the company's accounting records by $75,700 and an unrecorded customer list (15-year remaining life) assessed at a $51,300 fair value. Any remaining excess acquisition-date fair value was assigned to goodwill. Since acquisition, Mcllroy has applied the equity method to its Investment in Stinson account and no goodwill impairment has occurred. At year-end, there are no intra-entity payables or receivables. Intra-entity inventory sales between the two companies have been made as follows: Year 2020 2021 Cost to McIlroy $124,800 112,500 Transfer Price to Stinson $156,000 150,000 Ending Balance (at transfer price) $52,000 37,500 The individual financial statements for these two companies as of December 31, 2021, and the year then ended follow: Sales Cost of goods sold Operating expenses Equity in earnings in Stinson Net income Retained earnings, 1/1/21 McIlroy, Inc. $ (720,000) 473,200 194, 415 (33,071) $ (85, 456) $ (761,700) Stinson, Inc. $ (357,000) 218, 200 74,400 0 $ (64,400) $ (281,800) Sales Cost of goods sold Operating expenses Equity in earnings in Stinson Net income Retained earnings, 1/1/21 Net income Dividends declared Retained earnings, 12/31/21 Cash and receivables Inventory Investment in Stinson Buildings (net) Equipment (net) Patents (net) Total assets Liabilities Common stock Retained earnings, 12/31/21 Total liabilities and equities McIlroy, Inc. $ (720,000) 473,200 194, 415 (33,071) $ (85, 456) $ (761,700) (85, 456) 47,000 $ (800, 156) $ 272,700 256, 100 390, 477 332,000 237,100 0 $ 1,488,377 $ (388,221) (300,000) (800, 156) $(1,488, 377) Inc. $ (357,000) 218,200 74,400 0 $ (64,400) $ (281,800) (64,400) 17,200 $ (329,000) $ 149,800 130,600 0 203,900 87,800 22,300 $ 594,400 $ (165, 400) (100,000) (329,000) $ (594,400) (Note: Parentheses indicate a credit balance.) a. Show how Mcllroy determined the $390,477 Investment in Stinson account balance. Assume that Mcllroy defers 100 percent of downstream intra-entity profits against its share of Stinson's income. b. Prepare a consolidated worksheet to determine appropriate balances for external financial reporting as of December 31, 2021