Following are the individual financial statements for Gibson and Davis for the year ending December 31, 2013:

Gibson acquired 60 percent of Davis on April 1, 2013, for $528,000. On that date, equipment owned by Davis (with a five-year remaining life) was overvalued by $30,000. Also on that date, the fair value of the 40 percent non-controlling interest was $352,000. Davis earned income evenly during the year but paid the entire dividend on November 1, 2013.

a. Prepare a consolidated income statement for the year ending December 31, 2013.

b. Determine the consolidated balance for each of the following accounts as of December 31, 2013:

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Gibson Davis S (600,000) 300,000 174,000 (24,000) S 300,000)) 140,000 60,000 Sales Cost of goods sold Operating expenses Dividend income S (150,000) Net income (100,000) S (700,000) (150,000) 80,000 Retained earmings, 1/1/13 (400,000) (100,000) 40,000 Net income Dividends paid Retained eamings, 12/31/13 S (770,000) S (460,000) S 248,000 500,000 528,000 524,000 400,000 Cash and receivables 100,000 190,000 Inventory Investment in Davis Buildings (net) Equipment (net) 600,000 400,000 S 2,200,000 S 1,290,000 Total assets S (800,000) (630,000) (770,000) S (490,000) (340,000) (460,000) Liabilities Common stock Retained eamings, 12/31/13 S (1,290,000) Total liabilities and stockholders' equity S (2,200,000)