Intercompany Downstream Sales, Cost Method LO 6 Pruitt Corporation owns 90% of the common stock of Sedbrook Company. The stock was purchased for $625,500 on January 1,2017 , when Sedbrook Company's retained earnings were $95,000. Preclosing trial balances for the two companies at December The January 1,2021 , inventory of Sedbrook Company includes $25,000 of profit recorded by Pruitt Corporation on 2020 sales. During 2021, Pruitt Corporation made intercompany sales of $250,000 with a markup of 20% on cost. The ending inventory of Sedbrook Company includes goods purchased in 2021 from Pruitt for $60,000. Required: 1. Prepare the consolidated statements workpaper for the year ended December 31, 2021. 2. Calculate consolidated retained earnings on December 31,2021 , using the analytical or t-account approach