Consolidation Problem (58 points) December 31, 2018, follow. Gibson acquired a 60 percent interest in Keller on January 1, 2017, The individual financial statements for Gibson Company and Keller Company for the year and noncontrolling interest was $380,000 and Keller's book value was 5850.000. Keller had developed exchange for various considerations totaling $570,000. At the acquisition date the fair value of the internally a customer list that was not recorded on its books but had an acquisition date face value of Sales $ (500,000) 300,000 60.000 -0- 3. $ $100,000. This intangible asset is being amortized over 20 years. Srabanuary 1, 2017, Gibson sold a building with a book value of $60,000 (and a historical cost of $140,000) to Keller for 100.000. keileine holds this building at the end of the current year. The building had a 10-year remaining life at the date of transfer. Keller regularly transfers inventory to Gibson. In 2017, it shipped inventory costing S100.000 to Gibson at a price of $150,000. During 2018, intra-entity sales totaled $200,000, although the original cost to Keller was only $140,000. In each of these years, 20 percent of the merchandise was not resold to outside parties until the period following the transfer. The 2018 financial statements are as follows: Gibson Company Keller Company $ (800,000) Cost of goods sold 500,000 Operating expenses 100,000 Equity in earnings of Keller (83,800) Net income $ (283,800) $ (140,000) Retained earnings, 1/1/18 $(1,067,000) $ (620,000) Net income (above) (283,800) (140,000) Dividends declared 115,000 60,000 Retained earnings, 12/31/18 $(1,235,800) $ (700,000) Cash $ 177,000 90,000 Accounts receivable 356,000 410,000 Inventory 440,000 320,000 Investment in Keller 680,800 -0- Land 180,000 390,000 Buildings and equipment (net) 492,000 300,000 Total assets $ 2,325,800 $ 1,510,000 Liabilities $ (480,000) $ (400,000) (320,000) (610,000) Common stock Additional paid-in capital -0- (90,000) (700,000) (1,235,800) Retained earnings, 12/31/18 $(2,325,800) $(1,510,000) Total liabilities and equities a. Prepare Gibson's acquisition-date fair-value allocation schedule for its investment in Keller. b. The parent reports Equity in earnings of Keller of $83,800 for 2018. Show how this figure w calculated. c. Calculate the amount of net income to be allocated to the noncontrolling interest. d. Prepare all the consolidation entries necessary at December 31, 2018. a e. On the template provided on the next page, prepare a worksheet for Gibson and Keller f year ending December 31, 2018. Consolidation Problem (58 points) December 31, 2018, follow. Gibson acquired a 60 percent interest in Keller on January 1, 2017, The individual financial statements for Gibson Company and Keller Company for the year and noncontrolling interest was $380,000 and Keller's book value was 5850.000. Keller had developed exchange for various considerations totaling $570,000. At the acquisition date the fair value of the internally a customer list that was not recorded on its books but had an acquisition date face value of Sales $ (500,000) 300,000 60.000 -0- 3. $ $100,000. This intangible asset is being amortized over 20 years. Srabanuary 1, 2017, Gibson sold a building with a book value of $60,000 (and a historical cost of $140,000) to Keller for 100.000. keileine holds this building at the end of the current year. The building had a 10-year remaining life at the date of transfer. Keller regularly transfers inventory to Gibson. In 2017, it shipped inventory costing S100.000 to Gibson at a price of $150,000. During 2018, intra-entity sales totaled $200,000, although the original cost to Keller was only $140,000. In each of these years, 20 percent of the merchandise was not resold to outside parties until the period following the transfer. The 2018 financial statements are as follows: Gibson Company Keller Company $ (800,000) Cost of goods sold 500,000 Operating expenses 100,000 Equity in earnings of Keller (83,800) Net income $ (283,800) $ (140,000) Retained earnings, 1/1/18 $(1,067,000) $ (620,000) Net income (above) (283,800) (140,000) Dividends declared 115,000 60,000 Retained earnings, 12/31/18 $(1,235,800) $ (700,000) Cash $ 177,000 90,000 Accounts receivable 356,000 410,000 Inventory 440,000 320,000 Investment in Keller 680,800 -0- Land 180,000 390,000 Buildings and equipment (net) 492,000 300,000 Total assets $ 2,325,800 $ 1,510,000 Liabilities $ (480,000) $ (400,000) (320,000) (610,000) Common stock Additional paid-in capital -0- (90,000) (700,000) (1,235,800) Retained earnings, 12/31/18 $(2,325,800) $(1,510,000) Total liabilities and equities a. Prepare Gibson's acquisition-date fair-value allocation schedule for its investment in Keller. b. The parent reports Equity in earnings of Keller of $83,800 for 2018. Show how this figure w calculated. c. Calculate the amount of net income to be allocated to the noncontrolling interest. d. Prepare all the consolidation entries necessary at December 31, 2018. a e. On the template provided on the next page, prepare a worksheet for Gibson and Keller f year ending December 31, 2018