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 $870,000. At the acquisition date, the fair value of the noncontrolling interest was $580,000 and Kellers book value was $1,160,000. Keller had developed internally a customer list that was not recorded on its books but had an acquisition-date fair value of $290,000. 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 $50,000 on January 2, 2020, for $120,000. Keller still holds this land at the end of the current year.

Keller regularly transfers inventory to Gibson. In 2020, it shipped inventory costing $238,000 to Gibson at a price of $340,000. During 2021, intra-entity shipments totaled $390,000, although the original cost to Keller was only $253,500. 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 $55,000 at the end of 2021.

	Gibson Company				Keller Company
Sales	$	(990,000	)		$	(690,000	)
Cost of goods sold		690,000				490,000
Operating expenses		180,000				50,000
Equity in earnings of Keller		(90,000	)			0
Net income	$	(210,000	)		$	(150,000	)
Retained earnings, 1/1/21	$	(1,306,000	)		$	(715,000	)
Net income (above)		(210,000	)			(150,000	)
Dividends declared		120,000				65,000
Retained earnings, 12/31/21	$	(1,396,000	)		$	(800,000	)
Cash	$	188,000			$	100,000
Accounts receivable		394,000				600,000
Inventory		580,000				510,000
Investment in Keller		1,002,000				0
Land		160,000				580,000
Buildings and equipment (net)		515,000				490,000
Total assets	$	2,839,000			$	2,280,000
Liabilities	$	(663,000	)		$	(900,000	)
Common stock		(780,000	)			(510,000	)
Additional paid-in capital		0				(70,000	)
Retained earnings, 12/31/21		(1,396,000	)			(800,000	)
Total liabilities and equities	$	(2,839,000	)		$	(2,280,000	)

(Note: Parentheses indicate a credit balance.)

1. Prepare a worksheet to consolidate the separate 2021 financial statements for Gibson and Keller.

2. How would the consolidation entries in requirement (a) have differed if Gibson had sold a building on January 2, 2020, with a $155,000 book value (cost of $330,000) to Keller for $290,000 instead of land, as the problem reports? Assume that the building had a 10-year remaining life at the date of transfer.