On January 1, 2020, QuickPort Company acquired 90 percent of the outstanding voting stock of NetSpeed, Inc., for $1,107,000 in cash and stock options. At the acquisition date, NetSpeed had common stock of $1,150,000 and Retained Earnings of $57,500. The acquisition-date fair value of the 10 percent noncontrolling interest was $123,000. QuickPort attributed the $22,500 excess of NetSpeed's fair value over book value to a database with a five-year remaining life.

During the next two years, NetSpeed reported the following:

	Net Income	Dividends Declared
2020	$	31,500		$	4,500
2021		45,000			4,500

On July 1, 2020, QuickPort sold communication equipment to NetSpeed for $28,500. The equipment originally cost $32,500 and had accumulated depreciation of $5,500 and an estimated remaining life of three years at the date of the intra-entity transfer.

1. Compute the equity method balance in QuickPort's Investment in NetSpeed, Inc., account as of December 31, 2021.
2. Prepare the worksheet adjustments for the December 31, 2021, consolidation of QuickPort and NetSpeed.

1 No Transaction 1 Equipment Investment in NetSpeed Accumulated depreciation 2 2 3 3 4 4 Common stock - - NetSpeed Retained earnings-NetSpeed Investment in NetSpeed Noncontrolling interest Accounts Debit Credit 4,000 1,250 5,250 Database Investment in NetSpeed Noncontrolling interest Equity in earnings of NetSpeed Investment in NetSpeed 5 5 Investment in NetSpeed Dividends declared 1,150,000 84,500 18,000 4,050 4,050 6 6 Amortization expense Database 4,500 4,500 7 7 Accumulated depreciation Depreciation expense 500 500