Problem 2 Hoyle, Schaefer and Doupnik - Chapter 5 Modified Problem 18-I define intercompany sales to be Upstream instead of Downstream On January 1, 2020, Corgan Company acquired 80% 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 non-controlling interest fair value of $245,000. Corgan attributed the excess of fair value over Smashing's 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: 2020 2021 And Corgan reported: Net Income 150,000 130,000 Inventory purchases from Smashing Dividends 35,000 45,000 100,000 120,000 Smashing sells inventory to Corgan using a 60% markup on cost. At the end of 2020 and 2021, 40% of the current year purchases remain in Corgan's inventory 1. Compute the equity method balance in Corgan's Investment in Smashing, Inc. account as of December 31, 2021. 3. What is the consolidated total of noncontrolling interest appearing on the balance sheet? 2. Prepare the worksheet adjustment for the December 31, 2021, consolidation of Corgan and Smashing.