Intra$-$entity inventory sales between the two companies have been made as follows:

YearCost to PulaskiTransfer Price to SheridanEnding Balance $($at transfer price$)2023$$ $132,900$$ $166,125$$ $55,3752024113,100150,80037,700$

On January $1,2023,$ Pulaski, Incorporated, acquired a $60$ percent interest in the common

stock of Sheridan, Incorporated, for $$312,000.$ Sheridan's book value on that date

consisted of common stock of $$100,000$ and retained earnings of $$184,400.$ Also, the

acquisition$-$date fair value of the $40$ percent noncontrolling interest was $$208,000.$ The

subsidiary held patents $($with a $10-$year remaining life$)$ that were undervalued within the

company's accounting records by $$83,200$ and also had unpatented technology $(15-$year

estimated remaining life$)$ undervalued by $$58,800.$ 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.

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: On January $1,2023,$ Pulaski, Incorporated, acquired a $60$ percent interest in the common stock of Sheridan, Incorporated, for $\backslash$$$312,000.$ Sheridan's book value on that date consisted of common stock of $\backslash$$$100,000$ and retained earnings of $\backslash$$$184,400.$ Also, the acquisition$-$date fair value of the $40$ percent noncontrolling interest was $\backslash (\backslash$$ $208,000\backslash ).$ The subsidiary held patents $($with a $10-$year remaining life$)$ that were undervalued within the company's accounting records by $\backslash (\backslash$$ $83,200\backslash )$ and also had unpatented technology $(15-$year estimated remaining life$)$ undervalued by $\backslash$$$58,800.$ 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.

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:

$1.$ Show how Pulaski determined the $\backslash (\backslash$$ $377,467\backslash )$ Investment in Sheridan account balance. Assume that Pulaski defers $100$ percent of downstream intra$-$entity profits against its share of Sheridan's income.

$2.$ Prepare a consolidated worksheet to determine appropriate balances for external financial reporting as of December $31,2024.1.$ Show how Pulaski determined the $\backslash (\backslash$$ $377,467\backslash )$ Investment in Sheridan account balance. Assume that Pulaski defers $100$ percent of downstream intra$-$entity profits against its share of Sheridan's income.

$2.$ Prepare a consolidated worksheet to determine appropriate balances for external financial reporting as of December $31,2024.$