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On January 1, 2017, C company acquired 70 percent of the outstanding voting stock of S, Inc., for a total of $1,050,000 in cash and other consideration. At the acquisition date, S inc had common stock of $810,000, retained earnings of $360,000, and a noncontrolling interest fair value of $450,000. C company attributed the excess of fair value over S inc book value to various covenants with a 20-year remaining life. C company uses the equity method to account for its investment in Smashing.

During the next two years, S inc reported the following:

	Net Income			Dividends Declared			Inventory Purchases from Corgan
2017	$	260,000		$	46,000		$	210,000
2018		240,000			56,000			230,000

C company sells inventory to S inc using a 60 percent markup on cost. At the end of 2017 and 2018, 40 percent of the current year purchases remain in S incs inventory.

1. Compute the equity method balance in C company Investment in S, Inc., account as of December 31, 2018.
2. Prepare the worksheet adjustments for the December 31, 2018, consolidation of C company and S Inc.