On Janusry $1,2023,$ Pulaski, Incorporated, acquired a $60$ percent interest in the common stock of Sheridan, Incorporsted, for

$$358,200.$ Sheridsn's book value on that date consisted of common stock of $$100,000$ and retained esrnings of $$211,800.$ Also, the

acquisition$-$date fair value of the $40$ percent noncontrolling interest was $$238,800.$ The subsidiary held patents $($with a $10-$year

remsining life$)$ thet were undervalued within the compony's accounting records by $$89,200$ and also hod unpotented technology $(15-$

year estimated remaining life$)$ undervalued by $$65,100.$ 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 intro$-$entity paysbles or receivables.

Intro$-$entity inventory soles between the two componies hove been mode as follows:

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

Note: Porentheses indicate o credit balance.

Required:

a$.$ Show how Pulaski determined the $$409,508$ Investment in Sheridan account balance. Assume that Pulsski defers $100$ percent of

downstream intro$-$entity profits against its share of Sheridan's income.

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

Complete this question by entering your answers in the tabs below.

Required A

Show how Pulaski determined the $$409,508$ Investment in Sheridan account balance. Assume that Pulaski defers $100$ percent

of downstream intra$-$entity profits against its share of Sheridan's income.

Note: Amounts to be deducted should be indicated with a minus sign.On January $1,2023,$ Pulaski, Incorporated, acquired a $60$ percent interest in the common stock of Sheridan, Incorporated, for $$358,200.$ Sheridan's book value on that date consisted of common stock of $$100,000$ and retained earnings of $$211,800.$ Also, the acquisition$-$date fair value of the $40$ percent noncontrolling interest was $$238,800.$ The subsidiary held patents $($with a $10-$year remaining life$)$ that were undervalued within the company's accounting records by $$89,200$ and also had unpatented technology $(15-$year estimated remaining life$)$ undervalued by $$65,100.$ 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$)$

$2023$ $ $139,200$ $ $174,000$ $ $58,000$

$2024112,800150,40037,600$