On January $1,2023,$ Pulaski, Incorporated, acquired a $60$ percent interest in the common stock of Sheridan, Incorporated, for $$372,000.$ Sheridan$$s book value on that date consisted of common stock of $$100,000$ and retained earnings of $$220,000.$ Also, the acquisition$-$date fair value of the $40$ percent noncontrolling interest was $$248,000.$ The subsidiary held patents $($with a $10-$year remaining life$)$ that were undervalued within the company$$s accounting records by $$70,000$ and also had unpatented technology $(15-$year estimated remaining life$)$ undervalued by $$45,000.$ 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$)$

$2023$ $ $120,000$ $ $150,000$ $ $50,000$

$2024112,000160,00040,000$

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 $ $(700,000)$ $ $(335,000)$

Cost of goods sold $460,000205,000$

Operating expenses $188,00070,000$

Equity in earnings in Sheridan $(28,000)0$

Net income $ $(80,000)$ $ $(60,000)$

Retained earnings, $1/1/24$ $ $(695,000)$ $ $(280,000)$

Net income $(80,000)(60,000)$

Dividends declared $45,00015,000$

Retained earnings, $12/31/24$ $ $(730,000)$ $ $(325,000)$

Cash and receivables $ $248,000$ $ $148,000$

Inventory $233,000129,000$

Investment in Sheridan $411,0000$

Buildings $($net$)308,000202,000$

Equipment $($net$)220,00086,000$

Patents $($net$)020,000$

Total assets $ $1,420,000$ $ $585,000$

Liabilities $ $(390,000)$ $ $(160,000)$

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

Retained earnings, $12/31/24(730,000)(325,000)$

Total liabilities and equities $ $(1,420,000)$ $ $(585,000)$

Note: Parentheses indicate a credit balance.

Required:

Show how Pulaski determined the $$411,000$ Investment in Sheridan account balance. Assume that Pulaski defers $100$ percent of downstream intra$-$entity profits against its share of Sheridan$$s income.

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