On January $1,2023,$ Pulaski, Incorporated, acquired a $60$ percent interest in the common stock of Sheridan, Incorporated, for $$348,000.$ Sheridan's book value on that date consisted of common stock of $$100,000$ and retained earnings of $$205,800.$ Also, the acquisition$-$date fair value of the $40$ percent noncontrolling interest was $$232,000.$ The subsidiary held patents $($with a $10-$year remaining life$)$ that were undervalued within the company's accounting records by $$52,300$ and also had unpatented technology $(15-$year estimated remaining life$)$ undervalued by $$46,800.$ 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:

YearCost to PulaskiTransfer Price to SheridanEnding Balance $($at transfer price$)2023$$ $121,500$$ $151,875$$ $50,6252024112,500150,00037,500$

The individual financial statements for these two companies as of December $31,2024,$ and the year then ended follow:

ItemsPulaski, IncorporatedSheridan, IncorporatedSales$ $(705,000)$$ $(342,000)$Cost of goods sold$463,300209,200$Operating expenses$189,40071,400$Equity in earnings in Sheridan$(32,580)0$Net income$ $(84,880)$$ $(61,400)$Retained earnings, $1/1/24$$ $(732,200)$$ $(280,500)$Net income$(84,880)(61,400)$Dividends declared$45,50015,400$Retained earnings, $12/31/24$$ $(771,580)$$ $(326,500)$Cash and receivables$ $262,000$$ $148,700$Inventory$246,200129,600$Investment in Sheridan$401,0250$Buildings $($net$)312,000202,700$Equipment $($net$)222,80086,300$Patents $($net$)020,400$Total assets$ $1,444,025$$ $587,700$Liabilities$ $(372,445)$$ $(161,200)$Common stock$(300,000)(100,000)$Retained earnings, $12/31/24(771,580)(326,500)$Total liabilities and equities$ $(1,444,025)$$ $(587,700)$

Note: Parentheses indicate a credit balance.

Required:

Show how Pulaski determined the $$401,025$ Investment in Sheridan account balance. Assume that Pulaski defers $100$ percent of downstream intra$-$entity profits against its share of Sheridan$$s income.

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