On January 1, 2020, Corgan Company acquired 70 percent of the outstanding voting stock of Smashing, inc, for a total of 51,085,000 in cash and other consideration. At the acquisition date, Smashing had common stock of $820,000, retained earnings of $370.000, and a noncontroling 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 2.020 and 2021.50 percent of the current year purchases remain in Smashing's inventory. a. Compute the equity method balance in Corgan's investment in Smasting. Inc, account as of December 31, 2021. b. Prepare the worksheet adjustments for the December 31, 2021, consolidation of Corgan and Smashing: Complete this question by entering your answers in the tabs below. Compute the equity method balance in Corgan's investment in. Smashing. Inc, account as of December 31,2021. Consolidation Worksheet Entries Notei Lnter debits befare credits. Consolidation Worksheet Entries Worksheet Entries 12 Prepare entry A Note: Enter debits before credits. Consolidation Worksheet Entries Consolidation Worksheet Entries Note: Enter debiti betore credits. Consolidation Worksheet Entries Consolidation Worksheet Entries 123 Note: Enter debits before credits. Consolidation Worksheet Entries On January 1, 2020, Corgan Company acquired 70 percent of the outstanding voting stock of Smashing, inc, for a total of 51,085,000 in cash and other consideration. At the acquisition date, Smashing had common stock of $820,000, retained earnings of $370.000, and a noncontroling 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 2.020 and 2021.50 percent of the current year purchases remain in Smashing's inventory. a. Compute the equity method balance in Corgan's investment in Smasting. Inc, account as of December 31, 2021. b. Prepare the worksheet adjustments for the December 31, 2021, consolidation of Corgan and Smashing: Complete this question by entering your answers in the tabs below. Compute the equity method balance in Corgan's investment in. Smashing. Inc, account as of December 31,2021. Consolidation Worksheet Entries Notei Lnter debits befare credits. Consolidation Worksheet Entries Worksheet Entries 12 Prepare entry A Note: Enter debits before credits. Consolidation Worksheet Entries Consolidation Worksheet Entries Note: Enter debiti betore credits. Consolidation Worksheet Entries Consolidation Worksheet Entries 123 Note: Enter debits before credits. Consolidation Worksheet Entries
