Keller Company acquired 75 percent of the outstanding common stock of Gibson Corporation on January 1, 2013. Keller Company paid a total of $835,000 in cash for these shares. The 25 percent noncontrolling interest shares had a total fair value of $255,000 both before and after Keller Company's acquisition. The Book Value of Gibson Corporation's Net Assets on January 1, 2013 was $465,000, which included the following: Gibson Corporations January 1, Common Stock Additional Paid In Capital Retained Earnings, January 1, 2013 ($135,000) ($160,000) ($170,000) Keller Company uses the Partial Equity method for internal recordkeeping to monitor the activities of Gibson Corporation. At the acquisition date, the carrying amounts of Gibson Corporation's assets and liabilities were generally equivalent to the fair value except for the following: Assets/Liabilities Equipment(Net) Buildings (Net) Land Loan Payable Book Value $65,000 $295,000 $100,000 (S250,000) Fair Value $110,000 $500,000 $150,000 ($300,000) Reaming Useful Life 10 Years 20 Years N/A 8 Years Fiscal Year 2014 Data: On January 1, 2014 Keller Company sold Gibson Corpa Building for $120,000 cash. The Buildings net book value on January 1, 2014 was $80,000 and its originally purchased price was $100,000. The building is expected to be usable for another 16 years. Both Keller and Gibson use the straight line method for depreciating assets. Subsection (a)(Consolidations) Calculate the annual excess amortization using the acquisition date fair value over book value of the identifiable assets and liabilities on the date of acquisition. Subsection (b)(Consolidations) Prepare the consolidated journal entries on December 31, 2015 for the Intra-Entity Building Transfer. Subsection (c)/Consolidations) The following consolidated worksheet for Keller Company and Gibson Corporation is to be used along with the information provided above to determine the consolidated balances "19" through "9)" below [Note: Calculations are involved): Keller Company & Gibson Corporation Consolidated Worksheet For Year Ending December 31, 2015 Consolidated Entries Noncontrolling Consolidated Accounts Keller Company Gibson Corporation Debit Credit Interest Totals Income Statement Sales Revenue (S$35,000) ($510,000) Cost of Goods Sold $211,900 $135,000 Utilities Expense $76,000 $68,000 Deprecation Expense $85,000 $80,000 2.) 1.) Interest Expense $65,000 $27,000 2.) Investment Income ($150,000) 3.) Separate Company Ner Income (S247,100) Consolidated Net Income Net Income Attributable To Noncontrolling Interest 4.) Ner Income Attributable to Gibson Corporation (S200,000) Statement of Retained Earnings Retained Earnings 1/1/15 (5556,925) (S231,000) 5.) 6.) 7.) (S200,000) $60,000 (S371,000) Net Income (Above) Dividends Declared Retained Earnings 12/31/15 (S247,100) $95,400 (S708,625) 8.) 8.) Keller Company Gibson Corporation Consolidated Entries Credit Noncontrolling Interest Consolidated Totals Debit Accounts Balance Sheet Assets: Cash Accounts Receivables Investment in Gibson Corporation $725,000 $122,875 $985,750.00 $384,500 $45,000 8.) 3.) 6.) 7.) 9.) 2.) 2.) 3.) $394,500 S473,500 Equipment(net) Building(net) $75,000 $165,000 $80,000 9.) $370,000 1.) 9.) $125,000 9.) 9.) $1,004,500 $250,000 $2,323,625 $2,938,125.00 Land Goodwill Total Assets Liabilities: Accounts Payable Loans Payable Total Liabilities ($365,000) ($600,000) (5965,000) ($108,500) (S230,000) 2.) (5338,500) 9.) (5650,000) Common Stock Additional Paid In Capital ($135,000) 7.) ($160,000) 7.) Noncontrolling Interest In Keller Company 1/1/15 7.) 9.) $131,500 $134,500 Noncontrolling interest In Keller Company 12/31/15 Retained Earning (Above) Total Owners Equity Total Liabilities & Owners Equity (5708,625) (S1,358,625) (S2,323,625) (8371,000) (5666,000) ($1,004,500) $1,440,250 $1,440,250 (52,938,125) Keller Company acquired 75 percent of the outstanding common stock of Gibson Corporation on January 1, 2013. Keller Company paid a total of $835,000 in cash for these shares. The 25 percent noncontrolling interest shares had a total fair value of $255,000 both before and after Keller Company's acquisition. The Book Value of Gibson Corporation's Net Assets on January 1, 2013 was $465,000, which included the following: Gibson Corporations January 1, Common Stock Additional Paid In Capital Retained Earnings, January 1, 2013 ($135,000) ($160,000) ($170,000) Keller Company uses the Partial Equity method for internal recordkeeping to monitor the activities of Gibson Corporation. At the acquisition date, the carrying amounts of Gibson Corporation's assets and liabilities were generally equivalent to the fair value except for the following: Assets/Liabilities Equipment(Net) Buildings (Net) Land Loan Payable Book Value $65,000 $295,000 $100,000 (S250,000) Fair Value $110,000 $500,000 $150,000 ($300,000) Reaming Useful Life 10 Years 20 Years N/A 8 Years Fiscal Year 2014 Data: On January 1, 2014 Keller Company sold Gibson Corpa Building for $120,000 cash. The Buildings net book value on January 1, 2014 was $80,000 and its originally purchased price was $100,000. The building is expected to be usable for another 16 years. Both Keller and Gibson use the straight line method for depreciating assets. Subsection (a)(Consolidations) Calculate the annual excess amortization using the acquisition date fair value over book value of the identifiable assets and liabilities on the date of acquisition. Subsection (b)(Consolidations) Prepare the consolidated journal entries on December 31, 2015 for the Intra-Entity Building Transfer. Subsection (c)/Consolidations) The following consolidated worksheet for Keller Company and Gibson Corporation is to be used along with the information provided above to determine the consolidated balances "19" through "9)" below [Note: Calculations are involved): Keller Company & Gibson Corporation Consolidated Worksheet For Year Ending December 31, 2015 Consolidated Entries Noncontrolling Consolidated Accounts Keller Company Gibson Corporation Debit Credit Interest Totals Income Statement Sales Revenue (S$35,000) ($510,000) Cost of Goods Sold $211,900 $135,000 Utilities Expense $76,000 $68,000 Deprecation Expense $85,000 $80,000 2.) 1.) Interest Expense $65,000 $27,000 2.) Investment Income ($150,000) 3.) Separate Company Ner Income (S247,100) Consolidated Net Income Net Income Attributable To Noncontrolling Interest 4.) Ner Income Attributable to Gibson Corporation (S200,000) Statement of Retained Earnings Retained Earnings 1/1/15 (5556,925) (S231,000) 5.) 6.) 7.) (S200,000) $60,000 (S371,000) Net Income (Above) Dividends Declared Retained Earnings 12/31/15 (S247,100) $95,400 (S708,625) 8.) 8.) Keller Company Gibson Corporation Consolidated Entries Credit Noncontrolling Interest Consolidated Totals Debit Accounts Balance Sheet Assets: Cash Accounts Receivables Investment in Gibson Corporation $725,000 $122,875 $985,750.00 $384,500 $45,000 8.) 3.) 6.) 7.) 9.) 2.) 2.) 3.) $394,500 S473,500 Equipment(net) Building(net) $75,000 $165,000 $80,000 9.) $370,000 1.) 9.) $125,000 9.) 9.) $1,004,500 $250,000 $2,323,625 $2,938,125.00 Land Goodwill Total Assets Liabilities: Accounts Payable Loans Payable Total Liabilities ($365,000) ($600,000) (5965,000) ($108,500) (S230,000) 2.) (5338,500) 9.) (5650,000) Common Stock Additional Paid In Capital ($135,000) 7.) ($160,000) 7.) Noncontrolling Interest In Keller Company 1/1/15 7.) 9.) $131,500 $134,500 Noncontrolling interest In Keller Company 12/31/15 Retained Earning (Above) Total Owners Equity Total Liabilities & Owners Equity (5708,625) (S1,358,625) (S2,323,625) (8371,000) (5666,000) ($1,004,500) $1,440,250 $1,440,250 (52,938,125)