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 $810,000. At the acquisition date, the fair value of the noncontrolling interest was $540,000 and Kellers book value was $1,080,000. Keller had developed internally a customer list that was not recorded on its books but had an acquisition-date fair value of $270,000. 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 $85,000 on January 2, 2020, for $180,000. Keller still holds this land at the end of the current year.

Keller regularly transfers inventory to Gibson. In 2020, it shipped inventory costing $208,000 to Gibson at a price of $320,000. During 2021, intra-entity shipments totaled $370,000, although the original cost to Keller was only $222,000. 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 $45,000 at the end of 2021.

	Gibson Company				Keller Company
Sales	$	(970,000	)		$	(670,000	)
Cost of goods sold		670,000				470,000
Operating expenses		160,000				40,000
Equity in earnings of Keller		(96,000	)			0
Net income	$	(236,000	)		$	(160,000	)
Retained earnings, 1/1/21	$	(1,286,000	)		$	(705,000	)
Net income (above)		(236,000	)			(160,000	)
Dividends declared		110,000				55,000
Retained earnings, 12/31/21	$	(1,412,000	)		$	(810,000	)
Cash	$	186,000			$	80,000
Accounts receivable		390,000				580,000
Inventory		560,000				490,000
Investment in Keller		996,000				0
Land		140,000				560,000
Buildings and equipment (net)		513,000				470,000
Total assets	$	2,785,000			$	2,180,000
Liabilities	$	(613,000	)		$	(790,000	)
Common stock		(760,000	)			(490,000	)
Additional paid-in capital		0				(90,000	)
Retained earnings, 12/31/21		(1,412,000	)			(810,000	)
Total liabilities and equities	$	(2,785,000	)		$	(2,180,000	)

(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 $145,000 book value (cost of $310,000) to Keller for $270,000 instead of land, as the problem reports? Assume that the building had a 10-year remaining life at the date of transfer.