On January $1,2022,$ Plymouth Corporation acquired $80$ percent of the outstanding voting stock of Sander Company in exchange for $$1,200,000$ cash. At that time, although Sander$$s book value was $$925,000,$ Plymouth assessed Sander$$s total business fair value at $$1,500,000.$ Since that time, Sander has neither issued nor reacquired any shares of its own stock.

The book values of Sander's individual assets and liabilities approximated their acquisition$-$date fair values except for the patent account, which was undervalued by $$350,000.$ The undervalued patents had a five$-$year remaining life at the acquisition date. Any remaining excess fair value was attributed to goodwill. No goodwill impairments have occurred.

Sander regularly sells inventory to Plymouth. The following are details of the intra$-$entity inventory sales for the past three years:

Year Intra$-$Entity Sales Intra$-$Entity Ending Inventory at Transfer Price Gross Profit Rate on Intra$-$Entity Inventory Transfers

$2022$ $ $125,000$ $ $80,00025\%$

$2023220,000125,00028$

$2024300,000160,00025$

Separate financial statements for these two companies as of December $31,2024,$ follow:

Items Plymouth Sander

Revenues $ $(1,740,000)$ $ $(950,000)$

Cost of goods sold $820,000500,000$

Depreciation expense $104,00085,000$

Amortization expense $220,000120,000$

Interest expense $20,00015,000$

Equity in earnings of Sander $(124,000)0$

Net income $ $(700,000)$ $ $(230,000)$

Retained earnings $1/1/24$ $ $(2,800,000)$ $ $(345,000)$

Net income $(700,000)(230,000)$

Dividends declared $200,00025,000$

Retained earnings $12/31/24$ $ $(3,300,000)$ $ $(550,000)$

Cash $ $535,000$ $ $115,000$

Accounts receivable $575,000215,000$

Inventory $990,000800,000$

Investment in Sander $1,420,0000$

Buildings and equipment $1,025,000863,000$

Patents $950,000107,000$

Total assets $ $5,495,000$ $ $2,100,000$

Accounts payable $ $(450,000)$ $ $(200,000)$

Notes payable $(545,000)(450,000)$

Common stock $(900,000)(800,000)$

Additional paid$-$in capital $(300,000)(100,000)$

Retained earnings $12/31/24(3,300,000)(550,000)$

Total liabilities and stockholders' equity $ $(5,495,000)$ $ $(2,100,000)$

Required:

Prepare a schedule that calculates the Equity in Earnings of Sander account balance.

Prepare a worksheet to arrive at consolidated figures for external reporting purposes. At year$-$end, there are no intra$-$entity