Quesiton $6$

ProForm acquir

a$.$ 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.

b$.$ Prepare 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 $A$

Required B

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.

Note: Amounts to be deducted should be indicated with a minus sign.

$\backslash$table$[[$Consideration transferred,,$],[2023$ ending inventory profit deferral,,$],[$Excess fair value amortization,,$],[$Increase in Sheridan's retained earnings $\frac{1}{1}\frac{?}{23}$ to $\frac{1}{1}\frac{?}{24},,],[$Pulaski$\text{'}$s equity in earnings of Stinson for $2024,,],[$Sheridan $2024$ dividends declared to Pulaski,,$],[$Investment account balance $\frac{12}{31}\frac{?}{24},,$$ed $70$ percent of ClipRite on June $30,2023,$ for $$1,470,000$ in cash. Based on ClipRite's acquisition$-$date fair value, an unrecorded intangible of $$760,000$ was recognized and is being amortized at the rate of $$19,000$ per year. No goodwill was recognized in the acquisition. The noncontrolling interest fair value was assessed at $$630,000$ at the acquisition date. The $2024$ financial statements are as follows:

$\backslash$table$[[$Items$,$ProForm,ClipRite$],[$Sales$,$$ $(1,030,000),$$ $(1,060,000)],[$Cost of goods sold,$650,000,515,000],[$Operating expense

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 indefinitelived 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:

$\backslash$table$[[$Cost to$,$Transfer Price,$\backslash$table$[[$Ending Balance$],[($at transfer$]],],[$Year$,$Pulaski,to Sheridan,price$)],[2023,$$$121,500,$$$151,875,$$$50,625$

On January $1,2022,$ Monica Company acquired $80$ percent of Young Company's outstanding common stock for $$888,000.$ The fair value of the noncontrolling interest at the acquisition date was $$222,000.$

Young reported stockholders' equity accounts on that date as follows:

$\backslash$table$[[$Common stock$-$$$10$ par value,$$300,000$