On January $1,2023,$ Pulaski, Incorporated, acquired a $60$ percent interest in the common stock of Sheridan, Incorporated, for $$362,400.$ Sheridan's book value on that date consisted of common stock of $$100,000$ and retained earnings of $$214,200.$ Also, the acquisition$-$date fair value of the $40$ percent noncontrolling interest was $$241,600.$ The subsidiary held patents $($with a $10-$year remaining life$)$ that were undervalued within the company's accounting records by $$82,600$ and also had unpatented technology $(15-$year estimated remaining life$)$ undervalued by $$57,900.$ Any remaining excess acquisition$-$date fair value was assigned to an indefinite$-$lived trade name. Since acquisition, Pulaski has applied the equity method to its Investment in Sheridan account. 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 Cost to Pulaski Transfer Price to Sheridan Ending Balance $($at transfer price$)$

$2023$ $ $132,000$ $ $165,000$ $ $55,000$

$2024113,100150,80037,700$

The individual financial statements for these two companies as of December $31,2024,$ and the year then ended follow:

Items Pulaski, Incorporated Sheridan, Incorporated

Sales $ $(745,000)$ $ $(378,000)$

Cost of goods sold $489,600230,800$

Operating expenses $200,49578,600$

Equity in earnings in Sheridan $(35,463)0$

Net income $ $(90,368)$ $ $(68,600)$

Retained earnings, $1/1/24$ $ $(800,900)$ $ $(284,100)$

Net income $(90,368)(68,600)$

Dividends declared $49,30019,800$

Retained earnings, $12/31/24$ $ $(841,968)$ $ $(332,900)$

Cash and receivables $ $286,900$ $ $151,500$

Inventory $269,500132,100$

Investment in Sheridan $409,6510$

Buildings $($net$)350,000206,800$

Equipment $($net$)249,80090,300$

Patents $($net$)025,200$

Total assets $ $1,565,851$ $ $605,900$

Liabilities $ $(423,883)$ $ $(173,000)$

Common stock $(300,000)(100,000)$

Retained earnings, $12/31/24(841,968)(332,900)$

Total liabilities and equities $ $(1,565,851)$ $ $(605,900)$

Note: Parentheses indicate a credit balance.

Required:

Show how Pulaski determined the $$409,651$ Investment in Sheridan account balance. Assume that Pulaski defers $100$ percent of downstream intra$-$entity profits against its share of Sheridan$$s income.

Prepare a consolidated worksheet to determine appropriate balances for external financial reporting as of December $31,2024.$