On January 1, 2020, Mcllroy, Inc., acquired a 60 percent interest in the common stock of Stinson, Inc., for $325,200. Stinson's book value on that date consisted of common stock of $100,000 and retained earnings of $192,300. Also, the acquisition-date fair value of the 40 percent noncontrolling interest was $216,800. The subsidiary held patents (with a 10-year remaining life) that were undervalued within the company's accounting records by $74,200 and an unrecorded customer list (15-year remaining life) assessed at a $50,100 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: Transfha Price Year 2020 2021 Cost to McIlroy $124,200 112,800 Transfu to Stinson $155, 250 150,400 Ending Balance (at transfer price) $51,750 37,600 The individual financial statements for these two companies as of December 31, 2021, and the year then ended follow: Chec Stinson, Inc. $ (353,000) 215,800 73,600 0 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 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 McIlroy, Inc. $ (715,000) 469,900 193,210 (32,654) $ (84,544) $ (754,700) (84,544) 46,500 (792,744) $ 270,200 253,800 384,548 325,000 232,100 $ (63,600) $ (281,300) (63,600) 16,500 $ (328,400) $ 149,600 130,400 203,600 87,000 21,700 $ 592,300 $ (163,900) (100,000) (328,400) $ (592,300) $ 1,465,648 (372,904) (300,000) (792,744) $(1,465,648) (Note: Parentheses indicate a credit balance.) a. Show how Mellroy determined the $384.548 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