On January 1, 2020, James Company purchased 100 percent of the outstanding voting stock of Nolan, Inc., for $1,000,000 in cash and other consideration. At the purchase date, Nolan had common stock of $500,000 and retained earnings of $185,000. James attributed the excess of acquisition-date fair value over Nolan's book value to a trade name with an estimated 25-year remaining useful life. James uses the equity method to account for its investment in Nolan. During the next two years, Nolan reported the following: 2020 2021 Income $78,000 $5,000 Dividends Declared $25,000 27,000 Inventory Transfers to James at Transfer Price $190,000 210,000 Nolan sells inventory to James after a markup based on a gross profit rate. At the end of 2020 and 2021, 30 percent of the current year purchases remain in James's inventory. Using the attached Excel template, compute the following: 2021 1. The Equity Method balance in James' Investment in Nolan, Inc., account as of December 31, 2. Worksheet adjustments for the December 31, 2021 adjustments of James and Nolan. Use the following Codes to designate the purpose of the journal entry: Consolidation entries: (*G) Recognition of intra-entity beginning inventory gross profit in current period consolidated net income. Downstream sales are attributed to parent. (S) Elimination of subsidiary's stocksolders' equity accounts along with recognition of the noncontrolling interest as of January 1. (A) Allocation of excess fair value over subsidiary's book value, unamortized balance as of January 1. (I) Elimination of intra-entity income remaining after *G elimination. (D) Elimination of intra-entity dividend. (E) Recognition of amortization expense for current year on excess fair value allocated to database. (P) Elimination of intra-entity receivable/payable balances. (TI) Elimination of intra-entity sales/purchases balances. (G) Deferral of intra-entity ending inventory gross profit from current period consolidated net income and removal of intra-entity gross profit from ending inventory. Formulate your solution so that Nolan's gross profit rate on sales to James is treated as a variable.