On January $1,2023,$ Pulaski, Incorporated, acquired a $60$ percent interest in the common stock of Sheridan, Incorporated, for $$327,000.$ Sheridan's book value on that date consisted of common stock of $$100,000$ and retained earnings of $$193,400.$ Also, the acquisition$-$date fair value of the $40$ percent noncontrolling interest was $$218,000.$ The subsidiary held patents $($with a $10-$year remaining life$)$ that were undervalued within the company's accounting records by $$72,700$ and also had unpatented technology $(15-$year estimated remaining life$)$ undervalued by $$48,600.$ 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:

Year Cost to Pulaski Transfer Price to Sheridan Ending Balance $($at transfer price$)$

$2023$ $ $122,700$ $ $153,375$ $ $51,125$

$2024113,400151,20037,800$

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

Items Pulaski, Incorporated Sheridan, Incorporated

Sales $ $(708,000)$ $ $(347,000)$

Cost of goods sold $465,300212,200$

Operating expenses $191,58572,400$

Equity in earnings in Sheridan $(31,909)0$

Net income $ $(83,024)$ $ $(62,400)$

Retained earnings, $1/1/24$ $ $(742,300)$ $ $(280,900)$

Net income $(83,024)(62,400)$

Dividends declared $46,00015,900$

Retained earnings, $12/31/24$ $ $(779,324)$ $ $(327,400)$

Cash and receivables $ $265,700$ $ $149,100$

Inventory $249,600129,900$

Investment in Sheridan $385,3380$

Buildings $($net$)318,000203,200$

Equipment $($net$)227,10086,800$

Patents $($net$)021,000$

Total assets $ $1,445,738$ $ $590,000$

Liabilities $ $(366,414)$ $ $(162,600)$

Common stock $(300,000)(100,000)$

Retained earnings, $12/31/24(779,324)(327,400)$

Total liabilities and equities $ $(1,445,738)$ $ $(590,000)$

Note: Parentheses indicate a credit balance.

Required:

Show how Pulaski determined the $$385,338$ Investment in Sheridan account balance. Assume that Pulaski defers $100$ percent of downstream intra$-$entity profits against its share of Sheridan$$s income.

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