On January $1,2023,$ Corgan Company acquired $70$ percent of the outstanding voting stock of Smashing, Incorporated, for a total of $$1,085,000$ in cash and other consideration. At the acquisition date, Smashing had common stock of $$820,000,$ retained earnings of $$370,000,$ and a noncontrolling interest fair value of $$465,000.$ 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. Answer is not complete.

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Required A

Required B

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.

During the next two years, Smashing reported the following:

Items Net Income Dividends Declared Inventory Purchases from Corgan

$2023$ $ $270,000$ $ $47,000$ $ $220,000$

$2024250,00057,000240,000$

Corgan sells inventory to Smashing using a $60$ percent markup on cost$.$ At the end of $2023$ and $2024,50$ percent of the current year purchases remain in Smashing's inventory.

Required:

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

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

On January $1,2023,$ Corgan Company acquired $70$ percent of the outstanding voting stock of Smashing, Incorporated, for a total of

$$1,085,000$ in cash and other consideration. At the acquisition date, Smashing had common stock of $$820,000,$ retained earnings of

$$370,000,$ and a noncontrolling interest fair value of $$465,000.$ 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 $2024,50$ 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.

Answer is not complete.

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