On January 1, 2020, Mellroy, Inc., acquired a 60 percent interest in the common stock of Stinson, Inc., for $378,000 Stinson's book value on that date consisted of common stock of $100,000 and retained earnings of $223,400. Also, the acquisition-date fair value of the 40 percent noncontrolling interest was $252,000. The subsidiary held patents (with a 10-year remaining life) that were undervalued within the company's accounting records by $80,800 and an unrecorded customer list (15-year remaining life) assessed at a $56,400 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 $130,200 to Stinson $162,750 150,000 2020 2021 Ending Balance (at transfer price) $54,2501 37,500 112,500 The individual financial statements for these two companies as of December 31, 2021, and the year then ended follow Sales Stinson, Inc. Cost of goods sold Operating expenses Equity in earnings in Stinson. Net income Retained earnings, 1/1/21 Net income Dividends declared McIlroy, Inc. $ (740,000) 486,300 199,215 (35,051) $ (89,536) $ (791,100) (89,536) 48,800 $ (374,000) 228,400 77,800 $ (67,800) $ (283,700) (67,800) 19,400 Retained earnings, 12/31/21 $ (831,836) $ (332,100) Cash and receivables $ 283,400 $ Inventory 266,200 151,200 131,800 Investment in Stinson 419,637 0 Buildings (net) 346,000 206, 100 247,000 89,900 B 24,500 $ 1,562,237 $ 603,500 $ (430,401) (300,000) (831,836) $(1,562,237) $ (171,400) (100,000) (332,100) $ (603,500) Equipment (net) Patents (net) Total assets Liabilities Common stock Retained earnings, 12/31/21 Total liabilities and equities (Note: Parentheses indicate a credit balance) a. Show how Mcllroy determined the $419,637 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 a. Show how Mcllroy determined the $419,637 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 Mcllroy determined the $419,637 Investment in Stinson account balance. Assume that Mcllroy 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.) Required A Required B > Prepare a cursunuated worksheet to determine appropriate valdices for Exial imantial reporting as of evenes 31, 2. For accuS WIRE multiple consolidation entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet. Input all amounts as positive values.) MCILROY, INC., AND STINSON, INC. Consolidation Worksheet For Year Ending December 31, 2021 Show less A Consolidation Entries Accounts Mcllroy Stinson Debit Credit NCI Consolidated Totals Sales $ (740,000) $ (374,000) Cost of goods sold Operating expenses Equity in earnings of Stinson 486,300 228,400 199,215 77,800 (35,051) 0 Separate company net income Consolidated net income To noncontrolling interest (89,536) (67,300) To Mcllroy, inc Retained earnings 1/1/21 (791,100) (283,700) Net income (89,536) (67,800) Dividends declared 48,800 19,400 Retained earnings 12/31/21 $ (831,836) $ (332,100) Cash and receivables $ 283,400 $ 151,200 Inventory 266,200 131,800 Investment in Stinson 419,637 0 Buildings (net) Equipment (net) 346,000 206,100 247,000 89,900 Patents (net) 0 24,500 Customer list Goodwill Total assets Liabtes Common stock Noncontrolling interest 1/1/21 Noncontrolling interest 12/31/21 Retained earnings 12/31/21 Total liabilities and equities $ 1,562,237 $ 603,500 (430,401) (300,000) (171,400) (100,000) (831,836) (332,100) $ (1,562,237) $ (603,500) $