On January 1, 2020, Mcllroy, Inc., acquired a 60 percent interest in the common stock of Stinson, Inc., for $420,000. Stinson's book value on that date consisted of common stock of $100,000 and retained earnings of $248,300. Also, the acquisition-date fair value of the 40 percent noncontrolling interest was $280,000. The subsidiary held patents (with a 10-year remaining life) that were undervalued within the company's accounting records by $87,100 and an unrecorded customer list (15-year remaining life) assessed at a $63,000 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: Year 2020 2021 Cost to McIlroy $138,000 112,800 Transfer Price to Stinson $172,500 150, 400 Ending Balance (at transfer price) $57,500 37,600 The individual financial statements for these two companies as of December 31, 2021, and the year then ended follow: The individual financial statements for these two companies as of December 31, 2021, and the year then ended follow: Stinson, Inc. $ (399,000) 243, 400 82, 800 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. $ (760,000) 499, 500 202,710 (38,034) S (95, 824) $ (829, 700) (95, 824) 51,300 $ (874,224) S 297, 100 279, 100 448, 688 370,000 264,000 0 $ 1,658,888 $ (484,664) (300,000) (874, 224) $(1,658,888) $ (72, 800) $ (286, 100) (72, 800) 21,300 $ (337, 600) 153,700 133, 900 o 208,500 92,100 26,800 $ 615,000 $ (177,400) (100,000) (337, 600) $ (615, 000) (Note: Parentheses indicate a credit balance.) a. Show how Mcllroy determined the $448,688 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 $448,688 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.) 0 $ 0 MCILROY, INC., AND STINSON, INC. Consolidation Worksheet For Year Ending December 31, 2021 Consolidation Entries Accounts Mcllroy Stinson Debit Credit NCI Consolidated Totals $ (760,000) S 499,500 202,710 (38,034) (95,824) (399,000) 243,400 82.800 0 (72,800) (829,700) (95,824) 51,300 (874.224) (286,100) (72,800) 21,300 (337.600) $ S Sales Cost of goods sold Operating expenses Equity in earnings of Stinson Separate company net income Consolidated net income To noncontrolling interest To Mcllroy, Inc. Retained earnings 1/1/21 Net income Dividends declared Retained earnings 12/31/21 To Mcllroy, Inc. 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) Customer list Goodwill Total assets Liabilities Common stock Noncontrolling interest 1/1/21 Noncontrolling interest 12/31/21 Retained earnings 12/31/21 Total liabilities and equities (829,700) (95,824) 51,300 (874,224) $ 297,100 $ 279, 100 448,688 370,000 264,000 (286, 100) (72,800) 21,300 (337,600) 153,700 133,900 $ $ 0 208,500 92,100 26.800 0 $ 1,658,888 $ (484,664) (300,000) 615,000 (177,400) (100,000) (874,224) (1,658,888) $ (337,600) (615,000) $ 0 $ 0