Prout Company owns $80\%$ of the common stock of Sexton Company. The stock was purchased for $$1,600,000$ on January $1,2022,$ when Sexton Company's retained earnings were $$800,000.$ On January $1,2024,$ Prout Company sold fixed assets to Sexton Company for $$360,000.$ These assets were originally purchased by Prout Company for $$400,000$ on January $1,2014,$ at which time their estimated depreciable life was $25$ years. The straight$-$line method of depreciation is used.A$.$

On December $31,2025,$ the trial balances of the two companies were as shown here:

Prout Company Sexton Company

Current Assets $$568,000$ $$271,000$

Fixed Assets $1,972,000830,000$

Other Assets $1,000,8001,600,000$

Investment in Sexton Company $1,600,000$

Dividends Declared $120,000100,000$

Cost of Goods Sold $942,000795,000$

Other Expenses $($including depreciation$)145,00090,000$

Income Tax Expense $187,20090,000$

$$Total $$6,535,000$ $$3,776,000$

Liabilities $$305,000$ $$136,000$

Accumulated Depreciation $375,000290,000$

Sales $1,475,0001,110,000$

Dividend Income $80,000$

Common Stock $3,000,0001,200,000$

Retained Earnings $1/11,300,0001,040,000$

$$Total $$6,535,000$ $$3,776,000$

Required:

A$.$ Prepare a consolidated statements workpaper for the year ended December $31,2025.$

B$.$ Assuming that on January $1,2026,$ Sexton Company sells the fixed assets purchased from Prout Company to a party outside the affiliated group for $$300,000$:

Prepare the entry that would have been entered on the books of Sexton Company to record the sale.

Prepare entries for the December $31,2026,$ consolidated statements workpaper necessitated by the sale of the assets.

Prepare any workpaper entries that will be needed in the December $31,2027,$ consolidated statements workpaper in regard to these fixed assets.