On January 1, 2020, Mcllroy, Inc., acquired a 60 percent Interest in the common stock of Stinson, Inc., for $383,400. Stinson's book value on that date consisted of common stock of $100,000 and retained earnings of $226,700. Also, the acquisition-date fair value of the 40 percent noncontrolling Interest was $255,600. The subsidiary held patents (with a 10-year remaining life) that were undervalued within the company's accounting records by $88,000 and an unrecorded customer list (15-year remaining life) assessed at a $63,900 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: Ending Balance Transfer Price Year Cost to McIlroy 2020 $138,300 112,800 to Stinson $172,875 150,400 (at transfer price) 2021 $57,625 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. Operating expenses Sales Cost of goods sold Equity in earnings in Stinson Net income Retained earnings, 1/1/21 Net income Dividends declared $ (763,000) $ (403,000) 501,500 203,085 245,800 83,600 (38,449) $ (96,864) $ (73,600) $ (840,900) $ (286,200) (96,864) 51,600 (73,600) 21,400 Retained earnings, 12/31/21 $ (886,164) $ (338,400) Cash and receivables $ 301, 200 $ Inventory 283,000 154,100 134,200 Investment in Stinson 425,348 Buildings (net) 374,000 208,700 266,980 92,200 e 27,000 $ 1,650,448 $ 616,200 $ (464,284) (300,000) $ (177,800) (886,164) $(1,650,448) (100,000) (338,400) $ (616,200) Equipment (net) Patents (net) Total assets Liabilities Connon stock Retained earnings, 12/31/21 Total liabilities and equities (Note: Parentheses Indicate a credit balance.) a. Show how Mcllroy determined the $425,348 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.