3 Aang, New to x New Tab eztor hm.tpx ewTab CanpeWhevy Shared with Syd ey Following are the individual financial statements for Gibson and Davis for the year ending December 31 2015: Sales Cost of goods sold Operating expenses Dividend income (738,000) S(470,500) 229,000 66,500 345,000 200,000 18,000) Net income s (211,000) (175,000) Retained earnings, 1/1/15 Net income Dividends declared s (779,000) (488,000) (175,000) 30,000 (211,000) 80,000 Retained earnings, 12/31/15 s (910,000) $ (633,000) s 274,150135000 Cash and receivables Inventory Investment in Davis Buildings (net) Equipment (net) 278,000 617,850 532,000 413,000 630,000 426,000 Total assets s 2,412,000 $1,469,000 Common stock Retained earnings, 12/31/15 s (872,000) (496,000) (340,000) (633,000) (630,000) (910,000) Total liabilities and stockholders' equity S(2,412,000) (1,469,000) Gibson acquired 60 percent of Davis on April 1, 2015, for $617,850. On that date, equipment owned by Davis (with a five-year remaining lIfe) was overvalued by $72.000 Also on that date, the fair value of the 40 percent noncontrolling interest was $411,900 Davis earned income evenly during the year but declared the S40,000 dividend on November 1, 2015