On January $1,2023,$ Pulaski, Incorporated, acquired a $60$ percent interest in the common stock of Sheridan, Incorporated, for $$383,400.$ Sheridan's book value on that date consisted of common stock of $$100,000$ and retained earnings of $$226,700.$ Also, the acquisition$-$date fair value of the $40$ percent noncontrolling interest was $$255,600.$ The subsidiary held patents $($with a $10-$year remaining life$)$ that were undervalued within the company's accounting records by $$88,000$ and also had unpatented technology $(15$year estimated remaining life$)$ undervalued by $$63,900.$ Any remaining excess acquisition$-$date fair value was assigned to an indefinitelived 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:

$\backslash$table$[[$Year$,$Cost to$,$Transfer Price,$\backslash$table$[[$Ending Balance$],[($at transfer$]]],[2023,$Pulaski,to Sheridan,price$)],[2024,138,300,$$$172,875,$$$57,625$

Note: Parentheses indicate a credit balance.

Required:

a$.$ Show how Pulaski determined the $$425,348$ Investment in Sheridan account balance. Assume that Pulaski defers $100$ percent of downstream intra$-$entity profits against its share of Sheridan's income.

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

Complete this question by entering your answers in the tabs below.

Show how Pulaski determined the $$425,348$ Investment in Sheridan account balance. Assume that Pulaski defers $100$ percent of downstream intra$-$entity profits against its share of Sheridan's income.

Note: Amounts to be deducted should be indicated with a minus sign.

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