On January 1, 2020, Mcllroy, Inc., acquired a 60 percent interest in the common stock of Stinson, Inc., for $384,600. Stinson's book value on that date consisted of common stock of $100,000 and retained earnings of $227,300. Also, the acquisition-date fair value of the 40 percent noncontrolling interest was $256,400. The subsidiary held patents (with a 10-year remaining life) that were undervalued within the company's accounting records by $83,800 and an unrecorded customer list (15-year remaining life) assessed at a $59,700 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 2821 $133,800 112,500 to Stinson $167,250 150,000 Ending Balance (at transfer price) $55,750 37,500 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 McIlroy, Inc. $ (749,000) Stinson, Inc. $ (385,000) 492,200 280,935 235,000 80,000 (36,359) $ (92,224) $ (70,000) $ (810,380) (92,224) 50,100 $ (284,680) (70,000) 20,100 $ (334,580) Retained earnings, 12/31/21 $ (852,424) Cash and receivables Inventory $ 290,200 272,600 $ 152,300 132,700 Investment in Stinson Buildings (net) 424,713 355,000 287,500 Equipment (net) Patents (net) Total assets Liabilities Common stock Retained earnings, 12/31/21 Total liabilities and equities (Note: Parentheses indicate a credit balance.) 253,300 $ 1,595,813 $ (443,389) (300,000) (852,424) $(1,595,813) 90,800 25,500 $ 628,800 $ (174,380) (100,000) (334,580) $ (688,880) a. Show how Mcllroy determined the $424,713 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 Show how McIlroy determined the $424,713 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.) Consideration transferred Increase in Stinson's retained eamings 1/1/20 to 1/1/21 Excess fair value amortization 0 S 0 < Required A Required B >