On January $1,2020,$ James Company purchased $100\%$ of the outstanding voting stock of Nolan, Inc., for $$1,000,000$ in cash and other consideration. At the purchase date, Nolan had common stock of $$500,000$ and retained earnings of $$185,000.$ James attributed the excess of acquisition$-$date fair value over Nolan's book value to a trade name with an estimated $25-$year remaining useful life. James uses the equity method to account for its investment in Nolan.

During the next $2$ years, Nolan reported the following.

Income

Dividends DeclaredInventory Transfers to James at Transfer Price

$2020$$$78,000$$$25,000$$$190,000202185,00027,000210,000$

Nolan sells inventory to James after a markup based on a gross profit rate. At the end of $2020$ and $2021,30\%$ of the current year purchases remain in James's inventory.

Using the attached Excel template, compute the following.

The Equity Method balance in James' Investment in Nolan, Inc., account as of December $31,2021$

Worksheet adjustments for the December $31,2021$ adjustments of James and Nolan

Use the following codes to designate the purpose of the journal entry.

Consolidation entries:

$(*$G$)$ Recognition of intra$-$entity beginning inventory gross profit in current period, consolidated net income. Downstream sales are attributed to parent.$($S$)$ Elimination of subsidiary's stockholders' equity accounts along with recognition of the noncontrolling interest as of January $1.($A$)$ Allocation of excess fair value over subsidiary's book value, unarmortized balance as of January $1.($I$)$ Elimination of intra$-$entity income remaining after $*$G elimination.$($D$)$ Elimination of intra$-$entity dividend.$($E$)$ Recognition of amortization expense for current year on excess fair value allocated to database.$($P$)$ Elimination of intro$-$entity receivable$/$payable balances.$($TI$)$ Elimination of intra$-$entity sales$/$purchases balances.$($G$)$ Deferral of intra$-$entity inventory gross profit from current period consolidated net income and removal of intra$-$entity gross profit form ending inventory.