On January 1, 2023, Pulaski, Incorporated, acquired a 60 percent interest in the common stock of Sheridan, Incorporated, for $392,400. Sheridan's book value on that date consisted of common stock of $100,000 and retained earnings of $231,900. Also, the acquisition-date fair value of the 40 percent noncontrolling interest was $261,600. The subsidiary held patents (with a 10-year remaining life) that were undervalued within the company's accounting records by $81,700 and also had unpatented technology (15- year estimated remaining life) undervalued by $57,000. 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 2023 2024 Cost to Pulaski $ 130,800 Transfer Price to Sheridan 113,400 $ 163,500 151,200 Ending Balance (at transfer price) $ 54,500 37,800 The individual financial statements for these two companies as of December 31, 2024, and the year then ended follow: Items Sales Cost of goods sold Operating expenses Equity in earnings in Sheridan Net income Retained earnings, 1/1/24 Net income Dividends declared Retained earnings, 12/31/24 Cash and receivables Inventory Investment in Sheridan Buildings (net) Pulaski, Incorporated $ (741,000) 487,000 199,020 (35,308) $ (90,288) $ (792,000) (90,288) 49,100 $ (833,188) $ 283,600 266,400 429,006 347,000 Sheridan, Incorporated $ (377,000) 230,200 78,400 0 $ (68,400) $ (283,800) (68,400) 19,600 $ (332,600) $ 151,400 132,000 0 206,500 Equipment (net) Patents (net) Total assets Liabilities Common stock Retained earnings, 12/31/24 Total liabilities and equities Note: Parentheses indicate a credit balance. Required: 247,700 $ 1,573,706 $ (440,518) (300,000) (833,188) $ (1,573,706) 90,100 24,800 $ 604,800 $ (172,200) (100,000) (332,600) $ (604,800) a. Show how Pulaski determined the $429,006 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.