On January 1, 2020, Corgan Company acquired 80 percent of the outstanding voting stock of Smashing, Inc., for a total of $1,080,000In cash and other consideration. At the acquisition date, Smashing had common stock of $780,000, retalned earnings of $330,000,and a noncontrolling Interest falr value of $270,000. Corgan attributed the excess of fair value over Smashing's book value to varlouscovenants with a 20-year remalning life. Corgan uses the equity method to account for Its Investment in Smashing.During the next two years, Smashing reported the following:InventoryPurchases fromDividendsNet IncomeDeclared$43,eee53,e00Corgan$180,000200, 0002020$230,000210,0002021Corgan sells Inventory to Smashing using a 60 percent markup on cost. At the end of 2020 and 2021, 40 percent of the current yearpurchases remaln in Smashing's Inventory.a. Compute the equity method balance in Corgan's Investment in Smashing, Ic., 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.Required ARequired BCompute the equity method balance in Corgan's Investment in Smashing, Inc., account as of December 31, 2021.Investment balance 12/31/211,193,000< Required ARequired B >

Format:- Annual amortization Consideration transferred Add: Non controlling interest…

On January 1, 2020, Corgan Company acquired 80 percent of the outstanding voting stock of Smashing, Inc., for a total of $1,080,000 In cash and other consideratlon. At the acquisition date, Smashing had common stock of $780,000, retalned earnings of $330,000, and a noncontrolling Interest falr value of $270,000. Corgan attributed the excess of falr value over Smashing's book value to varlous covenants with a 20-year remalning life. Corgan uses the equity method to account for Its Investment in Smashing. During the next two years, Smashing reported the following: Inventory Dividends Purchases from Corgan $180, e0e 200, eee Net Income Declared $43,e00 $230, e00 210, e00 2020 2021 53,000 Corgan sells Inventory to Smashing using a 60 percent markup on cost. At the end of 2020 and 2021, 40 percent of the current year purchases remaln in Smashing's Inventory. a. Compute the equity method balance In Corgan's Investment In Smashing, Inc., account as of December 31, 2021. b. Prepare the worksheet adjustments for the December 31, 2021, consolidation of Corgan and Smashing.

On January 1, 2020, Corgan Company acquired 80 percent of the outstanding voting stock of Smashing, Inc., for a total of $1,080,000 In cash and other consideratlon. At the acquisition date, Smashing had common stock of $780,000, retalned earnings of $330,000, and a noncontrolling Interest falr value of $270,000. Corgan attributed the excess of falr value over Smashing's book value to varlous covenants with a 20-year remalning life. Corgan uses the equity method to account for Its Investment in Smashing. During the next two years, Smashing reported the following: Inventory Dividends Purchases from Corgan $180, e0e 200, eee Net Income Declared $43,e00 $230, e00 210, e00 2020 2021 53,000 Corgan sells Inventory to Smashing using a 60 percent markup on cost. At the end of 2020 and 2021, 40 percent of the current year purchases remaln in Smashing's Inventory. a. Compute the equity method balance In Corgan's Investment In Smashing, Inc., account as of December 31, 2021. b. Prepare the worksheet adjustments for the December 31, 2021, consolidation of Corgan and Smashing.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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