Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Sales Cost of goods sold 303,000 Operating expenses 273,000 Dividend income (18,000) Gibson $ (798,000) $ Davis (418,500) 206,000 62,500 0 Net income $
Sales Cost of goods sold 303,000 Operating expenses 273,000 Dividend income (18,000) Gibson $ (798,000) $ Davis (418,500) 206,000 62,500 0 Net income $ (240,000) $ (150,000) Retained earnings, 1/1/21 $ (797,000) $ (457,000) Net income (240,000) (150,000) Dividends declared 60,000 30,000 Retained earnings, 12/31/21 $ (977,000) $ (577,000) Cash and receivables $ Inventory 254,500 591,000 $ 168,000 272,000 Investment in Davis 586,500 Buildings (net) 569,000 605,000 Equipment (net) Total assets Liabilities 486,000 408,000 $ 2,487,000 $ 1,453,000 $ (880,000) $ (536,000) Common stock (630,000) (340,000) Retained earnings, 12/31/21 (977,000) (577,000) Total liabilities and stockholders' equity $ (2,487,000) $ (1,453,000) Gibson acquired 60 percent of Davis on April 1, 2021, for $586,500. On that date, equipment owned by Davis (with a five-year remaining life) was overvalued by $69,000. Also on that date, the fair value of the 40 percent noncontrolling interest was $391,000. Davis earned income evenly during the year but declared the $30,000 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
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored 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