On January 1, 2023, Pulaski, Incorporated, acquired a 60 percent interest in the common stock of Sheridan, Incorporated, for $420,000. Sheridan's book value on that date consisted of common stock of $100,000 and retained earnings of $248,300. Also, the acquisition-date fair value of the 40 percent noncontrolling interest was $280,000. The subsidiary held patents (with a 10-year remaining life) that were undervalued within the company's accounting records by $87,100 and also had unpatented technology (15- year estimated remaining life) undervalued by $63,000. 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 Transfer Price to Sheridan Ending Balance (at transfer price) $ 138,000 $ 172,500 112,800 $ 57,500 37,600 150,400 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 $ (760,000) 499,500 202,710 (38,034) $ (95,824) $ (829,700) (95,824) 51,300 $ (874,224) $ 297,100 279,100 Sheridan, Incorporated $ (399,000) 243,400 82,800 0 $ (72,800) $ (286,100) (72,800) 21,300 $ (337,600) $ 153,700 133,900 0 208,500 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: 448,688 370,000 264,000 0 $ 1,658,888 $ (484,664) (300,000) (874,224) $ (1,658,888) 92,100 26,800 $ 615,000 $ (177,400) (100,000) (337,600) $ (615,000) a. Show how Pulaski determined the $448,688 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.