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 2021 $137,100 113,400 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. Operating expenses Sales Cost of goods sold Equity in earnings in Stinson Net income Retained earnings, 1/1/21 Net income Dividends declared Cash and receivables $ (755,000) 496,200 201,455 (37,567) Stinson, Inc. $ (395,000) 241,000 82,000 $ (94,912) $ (824,900) (94,912) 50,800 $ (72,000) $ (285,700) (72,000) 20,800 Retained earnings, 12/31/21 $ (869,012) $ (336,900) $ 295,500 $ Inventory Investment in Stinson 277,600 430,314 153,400 133,600 0 Buildings (net) Equipment (net) Patents (net) Total assets Liabilities Common stock Retained earnings, 12/31/21 Total liabilities and equities (Note: Parentheses indicate a credit balance.) 208,000 91,500 364,000 259,700 0 26,400 $ 1,627,114 $ 612,900 (458,102) (300,000) (869,012) $(1,627,114) (100,000) (336,900) $ (612,900) $ (176,000) 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. Complete this question by entering your answers in the tabs below.