On January 1, 2020, Mcllroy, Inc., acquired a 60 percent interest in the common stock of Stinson, Inc., for $391,800. Stinson's book value on that date consisted of common stock of $100,000 and retained earnings of $231,600. Also, the acquisition-date fair value of the 40 percent noncontrolling interest was $261,200. The subsidiary held patents (with a 10-year remaining life) that were undervalued within the company's accounting records by $85,600 and an unrecorded customer list (15-year remaining life) assessed at a $61,800 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 Year Cost to McIlroy 2020 $137,100 2021 113,400 to Stinson $171,375 151,200 Ending Balance (at transfer price) $57,125 37,800 The individual financial statements for these two companies as of December 31, 2021, and the year then ended follow: McIlroy, Inc. Sales $ (755,000) Stinson, Inc. $ (395,000) Cost of goods sold 496,200 Operating expenses 201,455 241,000 82,000 Equity in earnings in Stinson (37,567) Net income Retained earnings, 1/1/21 Net income Dividends declared Retained earnings, 12/31/21 $ (94,912) $ (72,000) $ (824,900) (94,912) 50,800 $ (869,012) $ (285,700) (72,000) 20,800 $ (336,900) Cash and receivables Inventory Investment in Stinson. Buildings (net) $ 295,500 277,600 $ 153,400 133,600 430,314 0 364,000 Equipment (net) 259,700 Patents (net) $ 1,627,114 $ (458,102) (300,000) (869,012) $(1,627,114) 208,000 91,500 26,400 $ 612,900 $ (176,000) (100,000) (336,900) $ (612,900) Total assets Liabilities Common stock Retained earnings, 12/31/21 Total liabilities and equities (Note: Parentheses indicate a credit balance.) a. Show how Mcllroy determined the $430,314 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. Answer is not complete. Complete this question by entering your answers in the tabs below.