On January $1,2020,$ Corgan Company acquired $80$ percent of the outstanding voting stock of Smashing, Inc., for a total of $$1,560,000$ in cash and other consideration. At the acquisition date, Smashing had common stock of $$900,000,$ retained earnings of $$450,000,$ and a noncontrolling interest fair value of $$390,000.$ Corgan attributed the excess of fair value over Smashing's book value to various covenants with a $20-$year remaining life. Corgan uses the equity method to account for its investment in Smashing. Prepare the worksheet adjustments for the December $31,2021,$ consolidation of Corgan and Smashing. $($If no entry is

required for a transaction$/$event$,$ select $"$No journal entry required" in the first account field.$)$ On January $1,2020,$ Corgan Company acquired $80$ percent of the outstanding voting stock of Smashing, Inc., for a total of $$1,560,000$

in cash and other consideration. At the acquisition date, Smashing had common stock of $$900,000,$ retained earnings of $$450,000,$

and a noncontrolling interest fair value of $$390,000.$ Corgan attributed the excess of fair value over Smashing's book value to various

covenants with a $20-$year remaining life. Corgan uses the equity method to account for its investment in Smashing.

During the next two years, Smashing reported the following:

Corgan sells inventory to Smashing using a $60$ percent markup on cost$.$ At the end of $2020$ and $2021,40$ percent of the current year

purchases remain in Smashing's inventory.

a$.$ Compute the equity method balance in Corgan's Investment in Smashing, Inc., account as of December $31,2021.$

b$.$ Prepare the worksheet adjustments for the December $31,2021,$ consolidation of Corgan and Smashing.

Complete this question by entering your answers in the tabs below.

Compute the equity method balance in Corgan's Investment in Smashing, Inc., account as of December $31,2021.$

During the next two years, Smashing reported the following:

Net Income Dividends Declared Inventory Purchases from Corgan

$2020$ $ $350,000$ $ $55,000$ $ $300,000$

$2021330,00065,000320,000$

Corgan sells inventory to Smashing using a $60$ percent markup on cost$.$ At the end of $2020$ and $2021,40$ percent of the current year purchases remain in Smashing's inventory.

Compute the equity method balance in Corgan's Investment in Smashing, Inc., account as of December $31,2021.$

Prepare the worksheet adjustments for the December $31,2021,$ consolidation of Corgan and Smashing.