Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Following are the individual financial statements for Gibson and Davis for the year ending December 31, 2021: Sales Cost of goods sold Operating expenses Dividend
Following are the individual financial statements for Gibson and Davis for the year ending December 31, 2021: Sales Cost of goods sold Operating expenses Dividend income Gibson (810,000) 388,000 248,000 (18,000) (192,000) Davis (428,500) 200,000 74,500 Net income $ $ $ $ Retained earnings, 1/1/21 Net income Dividends declared (734,000) (192,000) 50,000 (876,000) (154,000) (490,000) (154,000) 30,000 (614,000) Retained earnings, 12/31/21 $ $ Cash and receivables $ 69,000 233,000 Inventory Investment in Davis Buildings (net) Equipment (net) $ 50,500 537,000 619,500 621,000 480,000 $ 2,308,000 (802,000) (630,000) (876,000) 682,000 464,000 1,448,000 Total assets $ Liabilities Common stock Retained earnings, 12/31/21 Total liabilities and stockholders' equity (494,000) (340,000) (614,000) $ (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 $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
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started