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On January 1, 2017, McIlroy, Inc., acquired a 60 percent interest in the common stock of Stinson, Inc., for $392,400. Stinson's book value on that

On January 1, 2017, McIlroy, Inc., acquired a 60 percent interest in the common stock of Stinson, Inc., for $392,400. Stinson's book value on that date consisted of common stock of $100,000 and retained earnings of $231,900. Also, the acquisition-date fair value of the 40 percent noncontrolling interest was $261,600. The subsidiary held patents (with a 10-year remaining life) that were undervalued within the company's accounting records by $81,700 and an unrecorded customer list (15-year remaining life) assessed at a $57,000 fair value. Any remaining excess acquisition-date fair value was assigned to goodwill. Since acquisition, McIlroy has applied the equity method to its Investment in Stinson account and no goodwill impairment has occurred. 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 McIlroy Transfer Price to Stinson Ending Balance (at transfer price)
2017 $130,800 $163,500 $54,500
2018 113,400 151,200 37,800

The individual financial statements for these two companies as of December 31, 2018, and the year then ended follow:

McIlroy, Inc. Stinson, Inc.
Sales $ (741,000 ) $ (377,000 )
Cost of goods sold 487,000 230,200
Operating expenses 199,020 78,400
Equity in earnings in Stinson (35,308 ) 0
Net income $ (90,288 ) $ (68,400 )
Retained earnings, 1/1/18 $ (792,000 ) $ (283,800 )
Net income (90,288 ) (68,400 )
Dividends declared 49,100 19,600
Retained earnings, 12/31/18 $ (833,188 ) $ (332,600 )
Cash and receivables $ 283,600 $ 151,400
Inventory 266,400 132,000
Investment in Stinson 429,006 0
Buildings (net) 347,000 206,500
Equipment (net) 247,700 90,100
Patents (net) 0 24,800
Total assets $ 1,573,706 $ 604,800
Liabilities $ (440,518 ) $ (172,200 )
Common stock (300,000 ) (100,000 )
Retained earnings, 12/31/18 (833,188 ) (332,600 )
Total liabilities and equities $ (1,573,706 ) $ (604,800 )

A. Prepare a consolidated worksheet to determine appropriate balances for external financial reporting as of December 31, 2018.

The debit and credit of consolidation entries, the noncontrolling interest column and the consolidated total column are all necessary in answer.

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