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8 The individual financial statements for Gibson Company and Keller Company for the year ending December 31, 2018, follow. Gibson acquired a 60 percent interest
8 The individual financial statements for Gibson Company and Keller Company for the year ending December 31, 2018, follow. Gibson acquired a 60 percent interest in Keller on January 1, 2017, in exchange for various considerations totaling $1,020,000. At the acquisition date, the fair value of the noncontrolling interest was $680,000 and Keller's book value was $1,360,000. Keller had developed internally a customer list that was not recorded on ts hooks but had an acquisition-date fair value of $340,000. This intangible asset is being amortized over 20 years. Gibson sold Keller land with a book value of S75.000 on January 2, 2017, for $170,000. Keller still holds this land at the end of the current year Keller regularly transfers inventory to Gibson. In 2017, it shipped inventory costing $234,000 to Gibson at a price of $390,000. During 2018, intra-entity shipments totaled $440,000, although the original cost to Keller was only $308.000. In each of these years, 20 percent of the merchandise was not resold to outside parties until the period following the transfer. Gibson owes Keller S35,000 at the end of 2018 Gibson Conpany $(1,040,000) keller Company Sales Cost of goods sold Operating expense:s Equity in earnings of Keller (740,000) AeferencEs 5,888 126,00 75,90)8 255,000 Retained earnings, 1/1/13 Net income (above) Dividends declared (1,356,) (255,988) (740,) (125,899) 145, 8845,838 $(1,466,eee) (82e "eeg) Retained earnings, 12/31/18 S 193,908 Accounts receivable Inventory Investnent in Keller 404,900 630,000 650,030 560,000 63e,0ee Buildings and equipnent (net) 5 3,073,00 2,48e,020 Liabilities Connon stock Additional paid-in capital Retained earnings, 12/31/18 (777 , eee) (838,980) (96e ,eee) (180,000 1.466,80828,00 (2,480,ee0) Total liabilities and equities $(3,873,000) (Note: Parentheses indicate a credit balance)
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