Following are the individual financial statements for Gibson and Davis for the year ending December 31, 2018:

Gibson acquired 60 percent of Davis on April 1, 2018, 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 declared the $40,000 dividend on November 1, 2018.
a. Prepare a consolidated income statement for the year ending December 31, 2018.
b. Determine the consolidated balance for each of the following accounts as of December 31,
2018:
Goodwill ....................................... Buildings (net)
Equipment (net) ........................ Dividends Declared
Common Stock .................................................

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Glbson Davis Sales Cost of goods sold Operating expenses. Dividend income $ (600,000) $ (300,000) 140,000 60,000 300,000 174,000 (24,000) Net income $ (150,000) $(100,000) $ (700,000) $ (400,000) Retained earnings, 1/1/18 Net income Dividends declared 150,000) (100,000) 40,000 80,000 $770,000) (460,000 $ 248,000 100,000 190,000 Retained earnings, 12/31/18 Cash and receivables Inventory Investment in Davis Buildings (net) Equipment (net) 500,000 528,000 524,000 400,000 600,000 400,000 $2,200,000 $1,290,000 Total assets Liabilities Common stock Retained earnings, 12/31/18 (800,000) (490,000) (630,000) 340,000) 70 200 460 Total liabilities and stockholders' equity 1,290