Following are the individual financial statements for Gibson and Davis for the year ending December 31, 2021:

Gibson acquired 60 percent of Davis on April 1, 2021, for $511,500. 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 $341,000. 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

Prepare a consolidated income statement for the year ending December \begin{tabular}{|c|c|c|c|c|} \hline & \multicolumn{2}{|r|}{ Gibson } & \multicolumn{2}{|r|}{ Davis } \\ \hline Sales & $ & (718,000) & $ & (355,000) \\ \hline Cost of goods sold & & 332,000 & & 150,000 \\ \hline Operating expenses & & 214,000 & & 75,000 \\ \hline Dividend income & & (24,000) & & 0 \\ \hline Net income & $ & (196,000) & $ & (130,000) \\ \hline Retained earnings, 1/1/21 & & (705,000) & & (410,000) \\ \hline Net income & & (196,000) & & (130,000) \\ \hline Dividends declared & & 60,000 & & 40,000 \\ \hline Retained earnings, 12/31/21 & $ & (841,000) & $ & (500,000) \\ \hline Cash and receivables & $ & 228,500 & $ & 133,000 \\ \hline Inventory & & 504,000 & & 137,000 \\ \hline Investment in Davis & & 511,500 & & 0 \\ \hline Buildings (net) & & 538,000 & & 610,000 \\ \hline Equipment (net) & & 494,000 & & 494,000 \\ \hline Total assets & $ & 2,276,000 & $ & 1,374,000 \\ \hline Liabilities & & (805,000) & & (534,000) \\ \hline Common stock & & (630,000) & & (340,000) \\ \hline Retained earnings, 12/31/21 & & (841,000) & & (500,000) \\ \hline Totalliabilitiesandstockholdersequity & $ & (2,276,000) & $ & (1,374,000) \\ \hline \end{tabular} Determine the consolidated balance