On January 1, 2020, Mcllroy, Inc., acquired a 60 percent interest in the common stock of Stinson, Inc., for $378,000. Stinson's book value on that date consisted of common stock of $100,000 and retained earnings of $223,400. Also, the acquisition-date fair value of the 40 percent noncontrolling interest was $252,000. The subsidiary held patents (with a 10-year remaining life) that were undervalued within the company's accounting records by $80,800 and an unrecorded customer list (15-year remaining life) assessed at a $56,400 fair value. Any remaining excess acquisition- date fair value was assigned to goodwill. Since acquisition, Mcllroy 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: Transfer Price Ending Balance Cost to McIlroy to Stinson (at transfer price) $130,200 $162,750 $54,250 2021 112,500 150,000 37,500 Year 2020 The individual financial statements for these two companies as of December 31, 2021, and the year then ended follow: Sales Cost of goods sold Operating expenses Equity in earnings in Stinson Net income Retained earnings, 1/1/21 Net income Dividends declared Retained earnings, 12/31/21 McIlroy, Inc. $ (740,000) 486,300 199,215 (35,051) $ (89, 536) (791,100) (89, 536) 48,800 $ (831,836) Stinson, Inc. $ (374,000) 228,400 77,800 0 $ (67,800) $ (283,700) (67,800) 19,400 $ (332, 100) $ Cash and receivables Inventory Investment in Stinson Buildings (net) Equipment (net) Patents (net) Total assets Liabilities Common stock Retained earnings, 12/31/21 Total liabilities and equities 283,400 266,200 419, 637 346,000 247,000 0 $ 1,562,237 $ (430, 401) (300,000) (831,836) $(1,562,237) $ 151,200 131,800 0 206,100 89,900 24,500 $ 603,500 $ (171, 400) (100,000) (332,100) $ (603,500) Note: Parentheses indicate a credit balance.) a. Show how Mcllroy determined the $419,637 Investment in Stinson account balance. Assume that Mcllroy defers 100 percent of downstream intra-entity profits against its share of Stinson's income. b. Prepare a consolidated worksheet to determine appropriate balances for external financial reporting as of December 31, 2021. Complete this question by entering your answers in the tabs below. Required A Required B Prepare a consolidated worksheet to determine appropriate balances for external financial reporting as of December 31, 202 multiple consolidation entries are required, combine all debit entries into one amount and enter this amount in the debit colu Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet. Input all a Required A Required B Show how McIlroy determined the $419,637 Investment in Stinson account balance. Assume that McIlroy defers 100 percent of downstream intra-entity profits against its share of Stinson's income. (Amounts to be deducted should be indicated with a minus sign.) 0 0 Required A Required B > NCI Consolidated Totals $ For Year Ending December 31, 2021 Consolidation Entries Mcllroy Stinson Debit Credit (740,000) $ (374,000) 486,300 228.400 199,215 77,800 (35,051) 0 (89,536) (67,800) Accounts Sales Cost of goods sold Operating expenses Equity in earnings of Stinson Separate company net income Consolidated net income To noncontrolling interest To Mcllroy, Inc. Retained earnings 1/1/21 Net Income Dividends declared Retained earnings 12/31/21 Cash and receivables Inventory Investment in Stinson Buildings (net) Equipment (net) Patents (net) Customer list Goodwill Total assets $ $ (791,100) (89,536) 48,800 (831,836) $ 283,400 $ 266,200 419,637 346,000 247.000 0 (283,700) (67,800) 19.400 (332, 100) 151200 131,800 0 206,100 89.900 24,500 $ 1,562,237 $ 603,500 $ 1,562,237 $ (430,401) (300,000) 603,500 (171,400) (100,000) Total assets Liabilities Common stock Noncontrolling interest 1/1/21 Noncontrolling interest 12/31/21 Retained earnings 12/31/21 Total liabilities and equities (831,836) (1,562,237) $ (332,100) (603,500) $ $ 0$ 0