Following are the individual financial statements for Gibson and Davis for the year ending December 31, 2018:

	Gibson				Davis
Sales	$	(772,000	)		$	(409,500	)
Cost of goods sold		317,000				225,000
Operating expenses		231,000				80,500
Dividend income		(18,000	)			0
Net income	$	(242,000	)		$	(104,000	)
Retained earnings, 1/1/18	$	(728,000	)		$	(494,000	)
Net income		(242,000	)			(104,000	)
Dividends declared		50,000				30,000
Retained earnings, 12/31/18	$	(920,000	)		$	(568,000	)
Cash and receivables	$	204,800			$	216,000
Inventory		551,000				198,000
Investment in Davis		622,200				0
Buildings (net)		591,000				617,000
Equipment (net)		462,000				439,000
Total assets	$	2,431,000			$	1,470,000
Liabilities	$	(881,000	)		$	(562,000	)
Common stock		(630,000	)			(340,000	)
Retained earnings, 12/31/18		(920,000	)			(568,000	)
Total liabilities and stockholders' equity	$	(2,431,000	)		$	(1,470,000	)

Gibson acquired 60 percent of Davis on April 1, 2018, for $622,200. On that date, equipment owned by Davis (with a five-year remaining life) was overvalued by $48,000. Also on that date, the fair value of the 40 percent noncontrolling interest was $414,800. Davis earned income evenly during the year but declared the $40,000 dividend on November 1, 2018.

a.Prepare a consolidated income statement for the year ending December 31, 2018.

b.Determine the consolidated balance for each of the following accounts as of December 31, 2018:

Goodwill

Equipment (net)

Common stock

Buildings (net)

Dividends declared

a.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

b. Determine the consolidated balance for each of the following accounts as of December 31, 2018:

Goodwill
Equipment (net)
Common stock
Buildings (net)
Dividends declared