Q4. On December 28, 20X3, Stern Corporation and Ram Company established S&R Partnership, with cash contributions of $18,000 and $72,000, respectively. The partnership's purpose is to purchase from Stern accounts receivable that have an average collection period of 80 days and hold them to collection. The partnership borrows cash from Midtown Bank and purchases the receivables without recourse but at an amount equal to the expected percent to be collected, less a financing fee of 5 percent of the gross receivables. Stern and Ram hold 20 percent and 80 percent of the ownership of the partnership, respectively, and Stern guarantees both the bank loan made to the partnership and a 20 percent annual return on the investment made by Ram. Stern receives any income in excess of the 20 percent return guaranteed to Ram. The partnership agreement provides Stern total control over the partnership's activities. On December 31, 20X3, Stern sold $8,170,000 of accounts receivable to the partnership. The partnership immediately borrowed $7,540,000 from the bank and paid Stern $7,400,000. Prior to the sale, Stern had established a $411,000 allowance for uncollectibles on the receivables sold to the partnership. The balance sheets of Stern and S&R immediately after the sale of receivables to the partnership contained the following: Cash Accounts Receivable Allowance for Uncollectible Accounts Other Assets Prepaid Finance Charges Investment in S&R Partnership Accounts Payable Deferred Revenue Bank Notes Payable Bonds Payable Common Stock Retained Earnings Capital, Stern Corporation Capital, Ram Company Required: Stern Corporation S&R Partnership $ 8,098,000 4,390,000 $279,500 8,170,000 (213,000) 5,400,000 (411,000) 408,500 18,000 942,000 408,500 7,540,000 9,670,000 688,000 6,801,500 18,000 72,000 Assuming that Stern is S&R's primary beneficiary, prepare a consolidated balance sheet for Stern at January 1, 20X4.