On January 1, 2023, Pulaski, Incorporated, acquired a 60 percent interest in the common stock of Sheridan, Incorporated, for $372,000. Sheridan's book value on that date consisted of common stock of $100,000 and retained earnings of $219,900. Also, the acquisition-date fair value of the 40 percent noncontrolling interest was $248,000. The subsidiary held patents (with a 10-year remaining life) that were undervalued within the company's accounting records by $79,300 and also had unpatented technology (15-year estimated remaining life) undervalued by $54,900. Any remaining excess acquisition-date fair value was assigned to an indefinite-lived trade name. Since acquisition, Pulaski has applied the equity method to its Investment in Sheridan account. At year-end, there are no intra-entity payables or receivables.

On January 1, 2023, Pulaski, Incorporated, acquired a 60 percent interest in the common stock of Sheridan, Incorporated, for $372,000. Sheridan's book value on that date consisted of common stock of $100,000 and retained earnings of $219,900. Also, the acquisition-date fair value of the 40 percent noncontrolling interest was $248,000. The subsidiary held patents (with a 10-year remaining life) that were undervalued within the company's accounting records by $79,300 and also had unpatented technology (15year estimated remaining life) undervalued by $54,900. Any remaining excess acquisition-date fair value was assigned to an indefinitelived trade name. Since acquisition, Pulaski has applied the equity method to its Investment in Sheridan account. At year-end, there are no intra-entity payables or receivables. Intra-entity inventory sales between the two companies have been made as follows: The individual financial statements for these two companies as of December 31, 2024, and the year then ended follow: Note: Parentheses indicate a credit balance. Required: a. Show how Pulaski determined the $415,112 Investment in Sheridan account balance. Assume that Pulaski defers 100 percent of downstream intra-entity profits against its share of Sheridan's income. Note: Parentheses indicate a credit balance. Required: a. Show how Pulaski determined the $415,112 Investment in Sheridan account balance. Assume that Pulaski defers 100 percent of downstream intra-entity profits against its share of Sheridan's income. b. Prepare a consolidated worksheet to determine appropriate balances for external financial reporting as of December 31, 2024. Complete this question by entering your answers in the tabs below. Show how Pulaski determined the $415,112 Investment in Sheridan account balance. Assume that Pulaski defers 100 percent of downstream intra-entity profits against its share of Sheridan's income. Note: Amounts to be deducted should be indicated with a minus sign. \begin{tabular}{|c|c|c|c|c|c|c|c|c|} \hline \multicolumn{9}{|c|}{ PULASKI, INCORPORATED, AND SHERIDAN, INCORPORATED } \\ \hline \multicolumn{9}{|c|}{ Consolidation Worksheet } \\ \hline \multicolumn{9}{|c|}{ For Year Ending December 31, 2024} \\ \hline & \multirow{2}{*}{\multicolumn{2}{|c|}{ Pulaski }} & \multirow{2}{*}{\multicolumn{2}{|c|}{ Sheridan }} & \multicolumn{2}{|c|}{ Consolidation Entries } & \multirow[b]{2}{*}{\begin{tabular}{l} Noncontrolling \\ Interest \end{tabular}} & \multirow[b]{2}{*}{\begin{tabular}{c} Consolidated \\ Totals \end{tabular}} \\ \hline Accounts & & & & & Debit & Credit & & \\ \hline Sales & $ & (736,000) & $ & (368,000) & & & & \\ \hline Cost of goods sold & & 483,700 & & 224,800 & & & & \\ \hline Operating expenses & & 198,540 & & 76,600 & & & & ? \\ \hline Equity in earnings of Sheridan & & (34,256) & & 0 & & & & \\ \hline Separate company net income & & (88,016) & & (66,600) & & & & \\ \hline \multicolumn{9}{|l|}{ Consolidated net income } \\ \hline \multicolumn{9}{|l|}{ To noncontrolling interest } \\ \hline \multicolumn{9}{|l|}{ To Pulaski, Incorporated } \\ \hline Retained earnings 1/1/24 & & (780,200) & & (283,000) & & & & \\ \hline Net income & & (88,016) & & (66,600) & & & & \\ \hline Dividends declared & & 48,300 & & 19,000 & & & & \\ \hline Retained earnings 12/31/24 & $ & (819,916) & $ & (330,600) & & & & \\ \hline Cash and receivables & $ & 279,400 & $ & 150,500 & & & & \\ \hline Inventory & & 262,400 & & 131,200 & & & & \\ \hline Investment in Sheridan & & 415,112 & & 0 & & & & \\ \hline Buildings (net) & & 339,000 & & 205,600 & & & & \\ \hline Equipment (net) & & 242,000 & & 89,400 & & & & \\ \hline Patents (net) & & 0 & & 24,000 & & & & \\ \hline \multicolumn{9}{|l|}{ Unpatented technology } \\ \hline \multicolumn{9}{|l|}{ Trade name } \\ \hline Total assets & $ & 1,537,912 & $ & 600,700 & & & & \\ \hline Liabilities & & (417,996) & & (170,100) & & & & \\ \hline Common stock & & (300,000) & & (100,000) & & & & \\ \hline \multicolumn{9}{|l|}{ Noncontrolling interest 1/1/24 } \\ \hline \multicolumn{9}{|l|}{ Noncontrolling interest 12/31/24 } \\ \hline Retained earnings 12/31/24 & & (819,916) & & (330,600) & & & & \\ \hline Total liabilities and equities & $ & (1,537,912) & $ & (600,700) & $ & $ & & \\ \hline \end{tabular} Required A Required B