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 $840,000. At the acquisition date, the fair value of the noncontrolling interest was $560,000 and Keller's book value was $1,120,000. Keller had developed internally a customer list that was not recorded on its books but had an acquisition-date fair value of $280,000. 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 $90,000 on January 2, 2020, for $190,000. Keller still holds this land at the end of the current year. Keller regularly transfers inventory to Gibson. In 2020, it shipped inventory costing $198,000 to Gibson at a price of $330,000. During 2021, intra-entity shipments totaled $380,000, although the original cost to Keller was only $266,000. 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 $50,000 at the end of 2021. Keller Company $ (680,000) 480,000 45,000 0 $ $ Sales Cost of goods sold Operating expenses Equity in earnings of Keller Net income Retained earnings, 1/1/21 Net income (above) Dividends declared Retained earnings, 12/31/21 Cash Accounts receivable Inventory Investment in Keller Land Buildings and enuinment (net) Gibson Company $ (980,000) 680,000 170,000 (93,000) $ (223,000) $ (1,296,000) (223,000) 115,000 $ (1,404,000) 187,000 392,000 570,000 1,011,000 150,000 514,000 (155,000) (710,000) (155,000) 60,000 (805,000) 90,000 590,000 500,000 $ $ 570,000 480,000 Sales Cost of goods sold Operating expenses Equity in earnings of Keller Net income Retained earnings, 1/1/21 Net income (above) Dividends declared Retained earnings, 12/31/21 Cash Accounts receivable Inventory Investment in Keller Land Buildings and equipment (net) Total assets Liabilities Common stock Additional paid-in capital Retained earnings, 12/31/21 Total liabilities and equities Gibson Company $ (980,000) 680,000 170,000 (93,000) (223,000) $ (1,296,000) (223,000) 115,000 $ (1,404,000) $ 187,000 392,000 570,000 1,011,000 150,000 514,000 $ 2,824,000 $ (650,000) (770,000) 0 (1,404,000) $ (2,824,000) Keller Company $ (680,000) 480,000 45,000 0 $ (155,000) $ (710,000) (155,000) 60,000 (805,000) $ 90,000 590,000 500,000 570,000 480,000 $ 2,230,000 $ (825,000) (500,000) (100,000) (805,000) $ (2,230,000) (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 $150,000 book value (cost of $320,000) to Keller for $280,000 instead of land, as the problem reports? Assume that the building had a 10-year remaining life at the date of transfer. Complete this question by entering your answers in the tabs below. Required A Required B How would the consolidation entries in requirement (a) have differed if Gibson had sold a building on January 2, 2020, with a $150,000 book value (cost of $320,000) to Keller for $280,000 instead of land, as the problem reports? Assume that the building had a 10-year remaining life at the date of transfer. (Do not round intermediate calculations. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Show less A view transaction list Consolidation Worksheet Entries 1 IN Consolidation Worksheet Entries 1 2 Prepare Entry *TA to defer the intra-entity gain as of the beginning of the year. Note: Enter debits before credits. Transaction Accounts Debit Credit Record entry Clear entry view consolidation entries Consolidation Worksheet Entries 2 Prepare Entry ED to remove the excess depreciation for the current year created by the transfer price. Note: Enter debits before credits. Transaction Accounts Debit Credit 2 Record entry Clear entry view consolidation entries