On January 1, 2017, Corgan Company acquired 80 percent of the outstanding voting stock of Smashing, Inc., for a total of $1,560,000 in cash and other consideration. At the acquisition date, Smashing had common stock of $900,000, retained earnings of $450,000, and a noncontrolling interest fair value of $390,000. 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: Dividends Declared $ 55,000 65,000 Net Income $350,000 330,000 Inventory Purchases from Corgan $300,000 320,000 2017 2018 Corgan sells inventory to Smashing using a 60 percent markup on cost. At the end of 2017 and 2018, 40 percent of the current year purchases remain in Smashing's inventory. a. Compute the equity method balance in Corgan's Investment in Smashing, Inc., account as of December 31, 2018. b. Prepare the worksheet adjustments for the December 31, 2018, consolidation of Corgan and Smashing. Required A Required B Prepare the worksheet adjustments for the December 31, 2018, consolidation of Corgan and Smashing. (If no entr transaction/event, select "No journal entry required" in the first account field.) view transaction list Consolidation Worksheet Entries 2 3 4 5 6 7 8 Prepare entry *G Note: Enter debits before credits. Transaction Accounts Debit Credit Record entry Clear entry view consolidation entries Required A Required B Compute the equity method balance in Corgan's Investment in Smashing, Inc., account as of December 31, 2018. Investment balance 12/31/18