On january 1, 2014, corgan company acquired 80 percent 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, retainedearnings of $250,000, and a noncontrolling interest fair value of $245,000. corgan attributed the excess of fair value oversmashing’s book value to various covenants with a 20-year remaining life. corgan uses the equity method to account forits investment in smashing. during the next two years, smashing reported the following: dlvldendsnet income declared inventory purchases from corgan2014 $150,000 $35,000 $100,000201 5 130,000 45,000 120,000corgan sells inventory to smashing using a 60 percent markup on cost. at the end of 2014 and 2015,40 percent of thecurrent year purchases remain in smashing’s inventory. a. compute the equity method balance in corgan’s investment in smashing, |nc., account as of december 31, 2015.b. prepare the worksheet adjustments for the december 31, 2015, consolidation of corgan and smashing.