Answered step by step
Verified Expert Solution
Question
1 Approved Answer
The individual financial statements for Gibson Company and Keller Company for the year ending December 3 1 , 2 0 2 1 , follow. Gibson
The individual financial statements for Gibson Company and Keller Company for the year ending December
follow. Gibson acquired a percent interest in Keller on January in exchange for various
considerations totaling $ At the acquisition date, the fair value of the noncontrolling interest was
$ and Keller's book value was $ Keller had developed internally a customer list that was not
recorded on its books but had an acquisitiondate fair value of $ This intangible asset is being
amortized over years. Gibson uses the partial equity method to account for its investment in Keller.
Gibson sold Keller land with a book value of $ on January for $ Keller still holds this
land at the end of the current year.
Keller regularly transfers inventory to Gibson. In it shipped inventory costing $ to Gibson at a
price of $ During intraentity shipments totaled $ although the original cost to Keller
was only $ In each of these years, percent of the merchandise was not resold to outside parties
until the period following the transfer. Gibson owes Keller $ at the end of
Note: Parentheses indicate a credit balance.
a Prepare a worksheet to consolidate the separate 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 with a $ book value cost of $ to Keller for $ instead of land, as
the problem reports? Assume that the building had a year remaining life at the date of transfer.
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