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In January 1, 2019, Strolle Company acquired an 70% interest in Hailey Company for a purchase price that was $500,000 over the book value of Hailey's Stockholders' Equity on the acquisition date. Spring uses the equity method to account for its investment in Hailey. Strolle assigned the acquisition-date AAP as follows: AAP Items Initial Fair Value Useful Life (years) Patent 10 350,000 Goodwill Indefinite 150,000 $500,000 Hailey sells inventory to Strolle (upstream) which includes that inventory in products that it (Strolle). ultimately, sells to customers outside of the controlled group. You have compiled the following data as of 2024 and 2025 Transfer price for inventory sale Cost of goods sold Gross profit % inventory remaining Gross profit deferred EOY Receivable/Payable 2024 $305,500 -259,675 $45,825 50% $22,913 2025 $500,000 -440,000 60,000 40% $24,000 $42,000 $18,000 The inventory not remaining at the end of the year has been sold outside of the controlled group. Strolle and Hailey report the following financial statements at December 31, 2025: Income Statement Strolle $4,500,000 -3.825,000 675,000 13,939 -323,000 $365,939 Hailey $750,000 (660,000) 90,000 Sales Cost of goods sold Gross Profit Income (loss) from subsidiary Operating expenses Net income -34.000 $56,000 BOY Retained Earnings Net income Dividends EOY Retained Earnings Statement of Retained Earnings Strolle $4,465,000 365,939 -105,400 $4.725,539 Balance Sheet Strolle Hailey $440,000 56,000 -10,000 $486.000 Hailey Assets Cash Accounts receivable Inventory Equity Investment PPE, net $425,000 545,000 425,000 $420,000 304,000 654,000 782,600 6,723,539 $8,884, 139 420,000 $1,815,000 Liabilities and Stockholders' Equity: Current Liabilities Long-term Liabilities Common Stock APIC Retained Earnings $340,000 1,750,000 853,600 1,215,000 4.725 539 $8,884,139 $175,000 753,000 92,100 308,900 486,000 $1.815,000 Required: a. Compute the EOY noncontrolling interest equity balance. b. Prepare the consolidation spreadsheet as of December 31, 2025: In January 1, 2019, Strolle Company acquired an 70% interest in Hailey Company for a purchase price that was $500,000 over the book value of Hailey's Stockholders' Equity on the acquisition date. Spring uses the equity method to account for its investment in Hailey. Strolle assigned the acquisition-date AAP as follows: AAP Items Initial Fair Value Useful Life (years) Patent 10 350,000 Goodwill Indefinite 150,000 $500,000 Hailey sells inventory to Strolle (upstream) which includes that inventory in products that it (Strolle). ultimately, sells to customers outside of the controlled group. You have compiled the following data as of 2024 and 2025 Transfer price for inventory sale Cost of goods sold Gross profit % inventory remaining Gross profit deferred EOY Receivable/Payable 2024 $305,500 -259,675 $45,825 50% $22,913 2025 $500,000 -440,000 60,000 40% $24,000 $42,000 $18,000 The inventory not remaining at the end of the year has been sold outside of the controlled group. Strolle and Hailey report the following financial statements at December 31, 2025: Income Statement Strolle $4,500,000 -3.825,000 675,000 13,939 -323,000 $365,939 Hailey $750,000 (660,000) 90,000 Sales Cost of goods sold Gross Profit Income (loss) from subsidiary Operating expenses Net income -34.000 $56,000 BOY Retained Earnings Net income Dividends EOY Retained Earnings Statement of Retained Earnings Strolle $4,465,000 365,939 -105,400 $4.725,539 Balance Sheet Strolle Hailey $440,000 56,000 -10,000 $486.000 Hailey Assets Cash Accounts receivable Inventory Equity Investment PPE, net $425,000 545,000 425,000 $420,000 304,000 654,000 782,600 6,723,539 $8,884, 139 420,000 $1,815,000 Liabilities and Stockholders' Equity: Current Liabilities Long-term Liabilities Common Stock APIC Retained Earnings $340,000 1,750,000 853,600 1,215,000 4.725 539 $8,884,139 $175,000 753,000 92,100 308,900 486,000 $1.815,000 Required: a. Compute the EOY noncontrolling interest equity balance. b. Prepare the consolidation spreadsheet as of December 31, 2025