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Following are the individual financial statements for Gibson and Davis for the year ending December 31, 2021: Sales Gibson Davis $ (643,000) $ (397,500)
Following are the individual financial statements for Gibson and Davis for the year ending December 31, 2021: Sales Gibson Davis $ (643,000) $ (397,500) Cost of goods sold 321,000 198,000 Operating expenses 180,000 75,500 Dividend income (24,000) 0 Net income $ (166,000) $ (124,000) Retained earnings, 1/1/21 $ (748,000) $ (405,000) Net income (166,000) (124,000) Dividends declared 70,000 40,000 Retained earnings, 12/31/21 $ (844,000) $ (489,000) Cash and receivables 254,400 149,000 Inventory 550,000 230,000 Investment in Davis 531,600 0 Buildings (net) 525,000 612,000 Equipment (net) Total assets Liabilities 495,000 412,000 $ 2,356,000 $ Common stock Retained earnings, 12/31/21 Total liabilities and stockholders' equity (844,000) $ (2,356,000) $ (1,403,000) $ 1,403,000 (882,000) $ (574,000) (630,000) (340,000) (489,000) Gibson acquired 60 percent of Davis on April 1, 2021, for $531,600. On that date, equipment owned by Davis (with a five-year remaining life) was overvalued by $75,000. Also on that date, the fair value of the 40 percent noncontrolling interest was $354,400. Davis earned income evenly during the year but declared the $40,000 dividend on November 1, 2021. a. Prepare a consolidated income statement for the year ending December 31, 2021. b. Determine the consolidated balance for each of the following accounts as of December 31, 2021: Goodwill Equipment (net) Common stock Buildings (net) Dividends declared Complete this question by entering your answers in the tabs below. Required A Required B Determine the consolidated balance for each of the following accounts as of December 31, 2021: Goodwill Equipment (net) Common stock Buildings (net) $ 630,000 $ 1,137,000 Dividends declared $ 70,000
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