On January 1, 2014, Corgan Company acquired 80 percent of the outstanding voting stock of Smashing, Inc., for a total of $1,440,000 in cash and other consideration. At the acquisition date, Smashing had common stock of $870,000, retained earnings of $420,000, and a noncontrolling interest fair value of $360,000. 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

2014

$

320,000

$

52,000

$

270,000

2015

300,000

62,000

290,000

Corgan sells inventory to Smashing using a 60 percent markup on cost. At the end of 2014 and 2015, 40 percent of the current year purchases remain in Smashings inventory.

a.

b.	Prepare the worksheet adjustments for the December 31, 2015, consolidation of Corgan and Smashing. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)