Question
Following are the individual financial statements for Gibson and Davis for the year ending December 31, 2018: Gibson Davis Sales $ (847,000 ) $ (470,000
Following are the individual financial statements for Gibson and Davis for the year ending December 31, 2018:
Gibson | Davis | ||||||
Sales | $ | (847,000 | ) | $ | (470,000 | ) | |
Cost of goods sold | 390,000 | 207,000 | |||||
Operating expenses | 271,000 | 77,000 | |||||
Dividend income | (24,000 | ) | 0 | ||||
Net income | $ | (210,000 | ) | $ | (186,000 | ) | |
Retained earnings, 1/1/18 | $ | (753,000 | ) | $ | (491,000 | ) | |
Net income | (210,000 | ) | (186,000 | ) | |||
Dividends declared | 80,000 | 40,000 | |||||
Retained earnings, 12/31/18 | $ | (883,000 | ) | $ | (637,000 | ) | |
Cash and receivables | $ | 254,100 | $ | 83,000 | |||
Inventory | 544,000 | 310,000 | |||||
Investment in Davis | 603,900 | 0 | |||||
Buildings (net) | 536,000 | 680,000 | |||||
Equipment (net) | 408,000 | 445,000 | |||||
Total assets | $ | 2,346,000 | $ | 1,518,000 | |||
Liabilities | $ | (833,000 | ) | $ | (541,000 | ) | |
Common stock | (630,000 | ) | (340,000 | ) | |||
Retained earnings, 12/31/18 | (883,000 | ) | (637,000 | ) | |||
Total liabilities and stockholders' equity | $ | (2,346,000 | ) | $ | (1,518,000 | ) | |
Gibson acquired 60 percent of Davis on April 1, 2018, for $603,900. On that date, equipment owned by Davis (with a five-year remaining life) was overvalued by $84,000. Also on that date, the fair value of the 40 percent noncontrolling interest was $402,600. Davis earned income evenly during the year but declared the $40,000 dividend on November 1, 2018.
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Prepare a consolidated income statement for the year ending December 31, 2018.
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Determine the consolidated balance for each of the following accounts as of December 31, 2018:
- Goodwill
- Equipment (net)
- Common stock
- Buildings (net)
- Dividends declared
Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required A Required B Prepare a consolidated income statement for the year ending December 31, 2018. (Enter all amounts as positive values.) Consolidated Income Statement For the Year Ending December 31, 2018 Revenues $ 1,199,500 Cost of goods sold $ 545,250 Operating expenses 316,150 861,400 Consolidated net income 338.100 Noncontrolling interest in CNI 60,840 Controlling interest in CNI 277 260 OOOO S
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