On January $1,2023,$ Pulaski, Incorporated, acquired a $60$ percent interest in the common stock of Sheridan, Incorporated, for $$384,600.$ Sheridan's book value on that date consisted of common stock of $$100,000$ and retained earnings of $$227,300.$ Also, the acquisition$-$date fair value of the $40$ percent noncontrolling interest was $$256,400.$ The subsidiary held patents $($with a $10-$year remaining life$)$ that were undervalued within the company's accounting records by $$78,400$ and also had unpatented technology $(15-$year estimated remaining life$)$ undervalued by $$54,300.$ 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$)$

$2023$ $ $127,200$ $ $159,000$ $ $53,000$

$2024112,500150,00037,500$

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 $ $(732,000)$ $ $(367,000)$

Cost of goods sold $481,100224,200$

Operating expenses $197,18576,400$

Equity in earnings in Sheridan $(34,189)0$

Net income $ $(87,904)$ $ $(66,400)$

Retained earnings, $1/1/24$ $ $(774,600)$ $ $(282,800)$

Net income $(87,904)(66,400)$

Dividends declared $47,90018,600$

Retained earnings, $12/31/24$ $ $(814,604)$ $ $(330,600)$

Cash and receivables $ $277,400$ $ $150,500$

Inventory $260,500131,200$

Investment in Sheridan $423,4530$

Buildings $($net$)338,000205,300$

Equipment $($net$)241,30089,100$

Patents $($net$)023,600$

Total assets $ $1,540,653$ $ $599,700$

Liabilities $ $(426,049)$ $ $(169,100)$

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

Retained earnings, $12/31/24(814,604)(330,600)$

Total liabilities and equities $ $(1,540,653)$ $ $(599,700)$Screenshot $2024-04-08...$

Sales