The individual financial statements for Gibson Company and Keller Company for the year ending December 31, 2011, follow. Gibson acquired a 60 percent interest in Keller on January 1, 2010, in exchange for various considerations totalling $570,000. At the acquisition date, the fair value of the noncontrolling interest was $380,000 and Kellers book value was $850,000. Keller had developed internally a customer list that was not recorded on its books but had an acquisition-date fair value of $100,000. This intangible asset is being amortized over 20 years.

Gibson sold Keller land with a book value of $60,000 on January 2, 2010, for $100,000. Keller still holds this land at the end of the current year.

Keller regularly transfers inventory to Gibson. In 2010, it shipped inventory costing $100,000 to Gibson at a price of $150,000. During 2011, intra-entity shipments totalled $200,000, although the original cost to Keller was only $140,000. 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 $40,000 at the end of 2011.

Gibson Keller

Company Company

Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (800,000) $ (500,000)

Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . . . . 500,000 300,000

Operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . 100,000 60,000

Income of Keller Company . . . . . . . . . . . . . . . . . . . . (84,000) 0

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (284,000) $ (140,000)

Retained earnings, 1/1/11 . . . . . . . . . . . . . . . . . . . . . $(1,116,000) $ (620,000)

Net income (above) . . . . . . . . . . . . . . . . . . . . . . . . . (284,000) (140,000)

Dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115,000 60,000

Retained earnings, 12/31/11 . . . . . . . . . . . . . . . . . $(1,285,000) $ (700,000)

Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 177,000 $ 90,000

Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . 356,000 410,000

Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 440,000 320,000

Investment in Keller Company . . . . . . . . . . . . . . . . . 726,000 0

Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 180,000 390,000

Buildings and equipment (net) . . . . . . . . . . . . . . . . . 496,000 300,000

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,375,000 $ 1,510,000

Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (480,000) $ (400,000)

Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (610,000) (320,000)

Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . 0 (90,000)

Retained earnings, 12/31/11 . . . . . . . . . . . . . . . . . . . (1,285,000) (700,000)

Total liabilities and equities . . . . . . . . . . . . . . . . . . $(2,375,000) $(1,510,000)

How would the consolidation entries in requirement (a) have differed if Gibson had sold a building with a $60,000 book value (cost of $140,000) to Keller for $100,000 instead of land, as the problem reports? Assume that the building had a 10-year remaining life at the date of transfer.