The individual financial statements for Gibson Company and Keller Company for the year ending December 3 1
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Question:
The individual financial statements for Gibson Company and Keller Company for the year ending December follow. Gibson acquired a percent interest in Keller on January in exchange for various considerations totaling $ At the acquisition date, the fair value of the noncontrolling interest was $ and Kellers book value was $ Keller had developed internally a customer list that was not recorded on its books but had an acquisitiondate fair value of $ This intangible asset is being amortized over years. Gibson uses the partial equity method to account for its investment in Keller.
Gibson sold Keller land with a book value of $ on January for $ Keller still holds this land at the end of the current year.
Keller regularly transfers inventory to Gibson. In it shipped inventory costing $ to Gibson at a price of $ During intraentity shipments totaled $ although the original cost to Keller was only $ In each of these years, percent of the merchandise was not resold to outside parties until the period following the transfer. Gibson owes Keller $ at the end of
Gibson Company Keller Company
Sales $ $
Cost of goods sold
Operating expenses
Equity in earnings of Keller
Net income $ $
Retained earnings, $ $
Net income above
Dividends declared
Retained earnings, $ $
Cash $ $
Accounts receivable
Inventory
Investment in Keller
Land
Buildings and equipment net
Total assets $ $
Liabilities $ $
Common stock
Additional paidin capital
Retained earnings,
Total liabilities and equities $ $
Note: Parentheses indicate a credit balance.
Prepare a worksheet to consolidate the separate financial statements for Gibson and Keller.
How would the consolidation entries in requirement a have differed if Gibson had sold a building on January with a $ book value cost of $ to Keller for $ instead of land, as the problem reports? Assume that the building had a year remaining life at the date of transfer. Prepare a worksheet to consolidate the separate financial statements for Gibson and Keller. Do not round intermediate calculations. For accounts where multiple consolidation entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet. Input all amounts as positive values.
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