Problem $5-27($Algo$)($LO $5-2,5-3,5-4,5-5)$

On January $1,2023,$ Pulaski, Incorporated, acquired a $60$ percent interest in the common stock of Sheridan, Incorporated, for $$325,200.$ Sheridan's book value on that date consisted of common stock of $$100,000$ and retained earnings of $$192,300.$ Also, the acquisition$-$date fair value of the $40$ percent noncontrolling interest was $$216,800.$ The subsidiary held patents $($with a $10-$year remaining life$)$ that were undervalued within the company's accounting records by $$74,200$ and also had unpatented technology $(15-$year estimated remaining life$)$ undervalued by $$50,100.$ 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:

YearCost to PulaskiTransfer Price to SheridanEnding Balance $($at transfer price$)2023$$ $124,200$$ $155,250$$ $51,7502024112,800150,40037,600$

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

ItemsPulaski, IncorporatedSheridan, IncorporatedSales$ $(715,000)$$ $(353,000)$Cost of goods sold$469,900215,800$Operating expenses$193,21073,600$Equity in earnings in Sheridan$(32,654)0$Net income$ $(84,544)$$ $(63,600)$Retained earnings, $1/1/24$$ $(754,700)$$ $(281,300)$Net income$(84,544)(63,600)$Dividends declared$46,50016,500$Retained earnings, $12/31/24$$ $(792,744)$$ $(328,400)$Cash and receivables$ $270,200$$ $149,600$Inventory$253,800130,400$Investment in Sheridan$384,5480$Buildings $($net$)325,000203,600$Equipment $($net$)232,10087,000$Patents $($net$)021,700$Total assets$ $1,465,648$$ $592,300$Liabilities$ $(372,904)$$ $(163,900)$Common stock$(300,000)(100,000)$Retained earnings, $12/31/24(792,744)(328,400)$Total liabilities and equities$ $(1,465,648)$$ $(592,300)$

Note: Parentheses indicate a credit balance.

Required:

Show how Pulaski determined the $$384,548$ Investment in Sheridan account balance. Assume that Pulaski defers $100$ percent of downstream intra$-$entity profits against its share of Sheridan$$s income.

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