Prepare the worksheet adjustments for the December $31,2024,$ consolidation of Corgan and Smashing.

Note: If no entry is required for a transaction$/$event$,$ select $"$No journal entry required" in the first account field.

$\backslash$table$[[$No$,$Transaction,Accounts,Debit,Credit$],[1,*,$Investment in Smashing,,$],[,,$Cost of goods sold,,$],[2,$S$,$Common stock $-$ Smashing,,$],[,,$Retained earnings $-$ Smashing,,$],[,,$Investment in Smashing,,$],[,,$Noncontrolling interest,,$],[3,$A$,$Covenants,,$],[,,$Investment in Smashing,,$],[,,$Noncontrolling interest,,$],[4,$I,Equity in earnings of Smashing,,$],[,,$Investment in Smashing,,$],[5,$D$,$Investment in Smashing,,$],[,,$Dividends declared,,$],[6,$E$,$Amortization expense,,$],[,,$Noncontrolling interest $\backslash$times $,,],[,,$Covenants $\backslash$times $,,],[7,$TI$,$Sales,,$],[,,$Cost of goods sold,,$],[8,$G$,$No Transaction Recorded,,$]]$On January $1,2023,$ Corgan Company acquired $70$ percent of the outstanding voting stock of Smashing, Incorporated, for a total of

$$1,015,000$ in cash and other consideration. At the acquisition date, Smashing had common stock of $$800,000,$ retained earnings of

$$350,000,$ and a noncontrolling interest fair value of $$435,000.$ 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 $2023$ and $2024,30$ percent of the current year

purchases remain in Smashing's inventory.

Required:

a$.$ Compute the equity method balance in Corgan's Investment in Smashing, Incorporated, account as of December $31,2024.$

b$.$ Prepare the worksheet adjustments for the December $31,2024,$ consolidation of Corgan and Smashing.