Problem $2($Recommended: review slides $42-54)$

On January $1,2024,$ Corgan Company acquired $\backslash (80\backslash \%\backslash )$ of the outstanding voting stock of Smashing, Inc., for a total of $\backslash$$$980,000$ in cash and other consideration. At the acquisition date, Smashing had common stock of $\backslash (\backslash$$ $700,000\backslash ),$ retained earnings of $\backslash (\backslash$$ $250,000\backslash ),$ and a non$-$controlling interest fair value of $\backslash (\backslash$$ $245,000\backslash ).$ Corgan attributed the excess of fair value over Smashing's book value to various covenants with a $20-$year life. Corgan uses the equity method to account for its investment in Smashing.

During the next two years, Smashing reported the following:

And Corgan reported:

Smashing sells inventory to Corgan using a $\backslash (60\backslash \%\backslash )$ markup on cost$.$ At the end of $2024$ and $2025,\backslash (40\backslash \%\backslash )$ of the current year purchases remain in Corgan's inventory.

$1.$ Compute the equity method balance in Corgan's Investment in Smashing, Inc. account as of December $31,2025.$

$2.$ Prepare the worksheet adjustment for the December $31,2025,$ consolidation of Corgan and Smashing.

$3.$ What is the consolidated total of noncontrolling interest appearing on the balance sheet?