On January $1,2023,$ Pulaski, Incorporated, acquired a $60$ percent interest in the common stock of Sheridan, Incorporated, for $$352,800.$ Sheridan's book value on that date consisted of common stock of $$100,000$ and retained earnings of $$208,500.$ Also, the acquisition$-$date fair value of the $40$ percent noncontrolling interest was $$235,200.$ The subsidiary held patents $($with a $10-$year remaining life$)$ that were undervalued within the company's accounting records by $$84,400$ and also had unpatented technology $(15-$year estimated remaining life$)$ undervalued by $$60,300.$ 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$)$

$2023$ $ $134,700$ $ $168,375$ $ $56,125$

$2024112,500150,00037,500$

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 $ $(750,000)$ $ $(388,000)$

Cost of goods sold $492,900236,800$

Operating expenses $200,81080,600$

Equity in earnings in Sheridan $(36,734)0$

Net income $ $(93,024)$ $ $(70,600)$

Retained earnings, $1/1/24$ $ $(818,600)$ $ $(285,000)$

Net income $(93,024)(70,600)$

Dividends declared $50,20020,200$

Retained earnings, $12/31/24$ $ $(861,424)$ $ $(335,400)$

Cash and receivables $ $293,300$ $ $152,700$

Inventory $275,500133,000$

Investment in Sheridan $404,6130$

Buildings $($net$)358,000207,600$

Equipment $($net$)255,40091,000$

Patents $($net$)025,800$

Total assets $ $1,586,813$ $ $610,100$

Liabilities $ $(425,389)$ $ $(174,700)$

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

Retained earnings, $12/31/24(861,424)(335,400)$

Total liabilities and equities $ $(1,586,813)$ $ $(610,100)$

Note: Parentheses indicate a credit balance.

Required:

Show how Pulaski determined the $$404,613$ Investment in Sheridan account balance. Assume that Pulaski defers $100$ percent of downstream intra$-$entity profits against its share of Sheridan$$s income.

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