Finder File Edit View Go Window Help A Screenshot 2024-04-08 at 1... @ ୪ .0 Mon Apr 8 1:35 AM Screenshot 2024-04-08... Sales S (732,000) $ (367,000) $ 150,000 $ Cost of goods sold 481,100 224,200 9,375 949,000 714,675 x Operating expenses 197,185 76,400 76,597 X Required A Required B Show how Pulaski determined the $423,453 Investment in Sheridan account balance. Assume that Pulaski defers 100 pc of downstream intra-entity profits against its share of Sheridan's income. Note: Amounts to be deducted should be indicated with a minus sign. Consideration transferred Equity in earnings of Sheridan (34,189) 0 34,189 Separate company net income Consolidated net income (87,904) (66,400) To noncontrolling interest To Pulaski, Incorporated Retained earnings 1/1/24 $ 384,600 Net income (774,600) (87,904) (282,800) (66,400) $ 2023 ending inventory profit deferral 350,411 Dividends declared 47,900 18,600 Excess fair value amortization 313,700 X Retained earnings 12/31/24 $ (814,604) $ (330,600) Increase in Sheridan's retained earnings 1/1/23 to 1/1/24 28,900 × 693,011 Pulaski's equity in earnings of Stinson for 2024 Cash and receivables Inventory $ 277,400 $ 150,500 260,500 131,200 Sheridan 2024 dividends declared to Pulaski Investment account balance 12/31/24 $ 1,077,611 Investment in Sheridan Buildings (net) 423,453 0 (1,057,400) ☑ (154,304) X 66,500 X $ (11,455,204) × $ 427,900 391,700 X 423,453 X 338,000 205,300 543,300 241,300 89,100 330,400 0 23,600 23,600 000 Equipment (net) Patents (net) Required A Required B > Unpatented technology Trade name Total assets Liabilities Common stock Noncontrolling interest 1/1/24 Noncontrolling interest 12/31/24 Retained earnings 12/31/24 Total liabilities and equities $ 1,540,653 $ 599,700 (426,049) (300,000) (169,100) (100,000) $ 2,140,353 X (595,149) (400,000) x (814,604) (330,600) 1,145,204 X $ (1,540,653) $ (599,700) $ 193,564 $ 0 $ 2,815,346 x 101 APR 8 wwwww2 A ☑ P W

On January 1, 2023, Pulaski, Incorporated, acquired a 60 percent interest in the common stock of Sheridan, Incorporated, for $384,600. Sheridan's book value on that date consisted of common stock of $100,000 and retained earnings of $227,300. Also, the acquisition-date fair value of the 40 percent noncontrolling interest was $256,400. The subsidiary held patents (with a 10-year remaining life) that were undervalued within the company's accounting records by $78,400 and also had unpatented technology (15-year estimated remaining life) undervalued by $54,300. 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:

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

Note: Parentheses indicate a credit balance.