On January 1, 2020, McIlroy, Inc., acquired a 60 percent interest in the common stock of Stinson, Inc., for $313,800. Stinson's book value on that date consisted of common stock of $100,000 and retained earnings of $185,500. Also, the acquisition-date fair value of the 40 percent noncontrolling interest was $209,200. The subsidiary held patents (with a 10-year remaining life) that were undervalued within the company's accounting records by $76,300 and an unrecorded customer list (15-year remaining life) assessed at a $52,200 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)
2020	$126,000	$157,500	$52,500
2021	112,800	150,400	37,600

The individual financial statements for these two companies as of December 31, 2021, and the year then ended follow:

	McIlroy, Inc.				Stinson, Inc.
Sales	$	(723,000	)		$	(358,000	)
Cost of goods sold		475,200				218,800
Operating expenses		195,410				74,600
Equity in earnings in Stinson		(33,194	)			0
Net income	$	(85,584	)		$	(64,600	)
Retained earnings, 1/1/21	$	(768,000	)		$	(282,000	)
Net income		(85,584	)			(64,600	)
Dividends declared		47,400				17,600
Retained earnings, 12/31/21	$	(806,184	)		$	(329,000	)
Cash and receivables	$	275,000			$	149,800
Inventory		258,300				130,600
Investment in Stinson		377,168				0
Buildings (net)		333,000				204,300
Equipment (net)		237,800				88,000
Patents (net)		0				22,400
Total assets	$	1,481,268			$	595,100
Liabilities	$	(375,084	)		$	(166,100	)
Common stock		(300,000	)			(100,000	)
Retained earnings, 12/31/21		(806,184	)			(329,000	)
Total liabilities and equities	$	(1,481,268	)		$	(595,100	)

(Note: Parentheses indicate a credit balance.)

1. Show how McIlroy determined the $377,168 Investment in Stinson account balance. Assume that McIlroy defers 100 percent of downstream intra-entity profits against its share of Stinsons income.

2. Prepare a consolidated worksheet to determine appropriate balances for external financial reporting as of December 31, 2021.