Your answer which should include a completed consolidation worksheet, consolidation entries including an explanation line, a consolidated income statement, and a consolidated balance sheet for $2022.$ The problem includes a fact pattern presented below and an Excel spreadsheet containing the $2022$ financial statements of Mack Corp $($the Parent$)$ and KappCo $($the Subsidiary$).$ The problem should be prepared on Excel spreadsheet$($s$).$

Mack Corp, a closely held manufacturer having a calendar year$-$end, searched for a vendor to provide it with a supply of quality widgets for its production facility. It had done business with KappCo for several years, and an opportunity to acquire the vendor was eagerly consummated. Mack Corp purchased $90$ percent of KappCo on January $1,2021,$ for $$657,000$ in cash. On that date, the $10$ percent noncontrolling interest was appraised to have a $$73,000$ fair value. On the date of acquisition, KappCo had a book value of $$600,000.$ Also at the acquisition date, KappCo held equipment $($four$-$year remaining life$)$ undervalued in its financial records by $$20,000$; interest$-$bearing liabilities $($five$-$year remaining life$)$ overvalued by $$40,000$; and the remainder of the excess of fair value over book value was assigned to previously unrecognized brand names $($trademarks$)$ with a fair value of $$50,000$ and an estimated $10-$year life. Mack uses the initial value method for accounting for its investment in KappCo.

Mack Corp sold KappCo an old building and lot on January $2,2021.$ On the date of the sale, the land on Mack$$s books was valued at $$15,000$ and had a sale value of $$20,000.$ The building had a cost on Mack$$s books of $$100,000,$ with $$90,000$ in accumulated depreciation. It had a sale value of $$25,000$ with a five$-$year remaining life. This was a cash sale. KappCo has used the land and building in its business operations since its purchase from Mack.

Each year, KappCo sells Mack Corp inventory at a $20$ percent gross profit rate. Intercompany sales were $$145,000$ in $2021$ and $$160,000$ in $2022.$ On January $1,2021,30$ percent of the $2020$ transfers were still on hand, and on December $31,2022,40$ percent of the $2021$ transfers remained unsold by Mack.

In fiscal year $2021,$ KappCo reported a net income of $$80,000$ and did not declare a dividend. In $2022,$ Mack Corp. declared dividends of $$130,000,$ and KappCo declared dividends of $$50,000.$ As of December $321,2022,$ Mack Corp owed KappCo $$17,000$ for inventory it had purchased in $2022.$

It was brought this to my attention about some misdating of inventory sales and inventory on hand at year$-$end. Please make these changes or notes to your problem:

There are no $2020$ sales of inventory that should be considered$--$only $2021$ and $2022.$

During $2021($post$-$acquisition$)70\%$ of the $2021$ intra$-$entity sales were sold, leaving $30\%$ unsold at $12-31-2021.$

During $2022,60\%$ of the intra$-$entity sales were sold, leaving $40\%$ unsold at $12-31-22.$