Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please answer the worksheet question only. Thanks The individual financial statements for Gibson Company and Keller Company for the year ending December 31, 2021, follow.

image text in transcribedimage text in transcribedimage text in transcribedimage text in transcribed

Please answer the worksheet question only. Thanks

The individual financial statements for Gibson Company and Keller Company for the year ending December 31, 2021, follow. Gibson acquired a 60 percent interest in Keller on January 1, 2020, in exchange for various considerations totaling $390,000. At the acquisition date, the fair value of the noncontrolling interest was $260,000 and Keller's book value was $510,000. Keller had developed internally a customer list that was not recorded on its books but had an acquisition-date fair value of $140,000. This intangible asset is being amortized over 20 years. Gibson uses the partial equity method to account for its investment in Keller. Gibson sold Keller land with a book value of $65,000 on January 2,2020 , for $130,000. Keller still holds this land at the end of the current year. Keller regularly transfers inventory to Gibson. In 2020, it shipped inventory costing $133,000 to Gibson at a price of $190,000. During 2021 , intra-entity shipments totaled $240,000, although the original cost to Keller was only $156,000. In each of these years, 20 percent of the merchandise was not resold to outside parties until the period following the transfer. Gibson owes Keller $60,000 at the end of 2021. (Note: Parentheses indicate a credit balance.) a. Prepare a worksheet to consolidate the separate 2021 financial statements for Gibson and Keller. b. How would the consolidation entries in requirement (a) have differed if Gibson had sold a building on January 2, 2020, with a $80,000 book value (cost of $180,000 ) to Keller for $140,000 instead of land, as the problem reports? Assume that the building had a 10-year remaining life at the date of transfer. Prepare a worksheet to consolidate the separate 2021 financial statements for Gibson and Keller. (Do not round intermediate calculations. Fc where multiple consolidation entries are required, combine all debit entries into one amount and enter this amount in the debit column of th Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet. Input all amounts as posi

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managefirst Managerial Accounting With Pencil/Paper Exam

Authors: National Restaurant Association

1st Edition

0132283417, 978-0132283410

More Books

Students also viewed these Accounting questions

Question

Design a training session to maximize learning. page 296

Answered: 1 week ago

Question

Design a cross-cultural preparation program. page 300

Answered: 1 week ago