On January 1, 2010, Corgan Company acquired 80 percent of the outstanding voting stock of Smashing, Inc., for a total of $980,000 in cash and other consideration. At the acquisition date, Smashing had common stock of $700,000, retained earnings of $250,000, and a noncontrolling interest fair value of $245,000. Corgan attributed the excess of fair value over Smashings 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: Net Income Dividends Inventory Purchases from Corgan 2010 $ 150,000 $ 35,000 $ 100,000 2011 130,000 45,000 120,000 Corgan sells inventory to Smashing using a 60 percent markup on cost. At the end of 2010 and 2011, 40 percent of the current year purchases remain in Smashings inventory. (a) Compute the equity method balance in Corgans Investment in Smashing, Inc., account as of December 31, 2011. (Omit the "$" sign in your response.) Investment balance 12/31/11 $ (b) Prepare the worksheet adjustments for the December 31, 2011, consolidation of Corgan and Smashing. (Omit the "$" sign in your response.)