Question
Following are the individual financial statements for Gibson and Davis for the year ending December 31, 2021: Sales Gibson Davis $ (810,000) $ (428,500)
Following are the individual financial statements for Gibson and Davis for the year ending December 31, 2021: Sales Gibson Davis $ (810,000) $ (428,500) Cost of goods sold 388,000 200,000 Operating expenses 248,000 74,500 Dividend income (18,000) 0 Net income $ (192,000) $ (154,000) Retained earnings, 1/1/21 $ (734,000) $ (490,000) Net income (192,000) (154,000) Dividends declared 50,000 30,000 Retained earnings, 12/31/21 $ (876,000) $ (614,000) Cash and receivables $ 50,500 $ Inventory 537,000 69,000 233,000 Investment in Davis 619,500 0 Buildings (net) 621,000 682,000 Equipment (net) Total assets Liabilities 480,000 464,000 $ 2,308,000 $ 1,448,000 $ (802,000) $ (494,000) Common stock (630,000) (340,000) Retained earnings, 12/31/21 (876,000) (614,000) Total liabilities and stockholders' equity $ (2,308,000) $ (1,448,000) Gibson acquired 60 percent of Davis on April 1, 2021, for $619,500. On that date, equipment owned by Davis (with a five-year remaining life) was overvalued by $78,000. Also on that date, the fair value of the 40 percent noncontrolling interest was $413,000. Davis earned income evenly during the year but declared the $30,000 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 Prepare a consolidated income statement for the year ending December 31, 2021. (Enter all amounts as positive values.) Consolidated Income Statement For the Year Ending December 31, 2021 Required A Required B >
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