On January $12023,$ Corgan Company acquired $80$ percent of the outstanding woting stack of Smashing, Incorparated, for a total of $$800,000$ in cash and other consideration. At the acquisition date, Smashing had comman stock of $$730,000,$ retained earnings of $$280,000,$ and a noncontroling interest falr value of $$220,000.$ Corgan attributed the exress of fair value over Smathing's book value to vailous covenants with a $20$ year remaining life. Corgan uses the equily method to account for its investment in Smashing.

During the next two years, Smashing reported the following:

$\backslash$table$[[$Iters$,$Net,Incom,$\backslash$table$[[$Dlvidends$],[$Declaned$]],\backslash$table$[[$Thwentory Purchases$],[$froe Corgan$]]],[2023,,188,000,$& $38,000,+136,000],[264,,168,000,48,000,156,008]]$

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

Required:

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

b$.$ Prepare the workshcet adjestments for the December $31,2024,$ consolidation of Corgan and Smashing.

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Tequired B

Prepare the worksheet sdjusments for the December $31,2024,$ consolidetion of Corgan and $5$ mashing.