The individual financial statements for Gibson Company and Keller Company for the year ending December 31, 2018, follow. Gibson acquired a 60 percent interest in Keller on January 1, 2017, in exchange for various considerations totaling $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, 2017, for $100,000. Keller still holds this land at the end of the current year. Keller regularly transfers inventory to Gibson. In 2017, it shipped inventory costing $100,000 to Gibson at a price of $150,000. During 2018, intra-entity shipments totaled $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 2018.

Gibson Company Keller Company Sales Cost of goods sold Operating expenses Equity in earnings of Keller s (800,00e) (500,000) 300,000 60,000 $ (800,000) 500,000 100,000 84,000 Net income $ (284,000) (140,000) Retained earnings, 1/1/18 Net income (above) Dividends declared $(1,116,000) $. (284,000) 115,000 $ (1,285,000) $ (620,000) (140,000) 60,000 Retained earnings, 12/31/18 Cash Accounts receivable Inventory Investment in Keller Land Buildings and equipment (net) $ 177,0 90,000 410,000 320,000 356,000 440,000 726,000 180,000 496,000 390,000 300,000 $ 2,375,00e 1,510 Total assets Liabilities Common stock Additional paid-in capital Retained earnings, 12/31/18 480,000) (400,000) (320,000) (90,000) (1,285,000)_ 790,900) $ (2,375,000) $ (1,510,000) (610,000) Total liabilities and equities Note: Parentheses indicate a credit balance.) a. Prepare a worksheet to consolidate the separate 2018 financial statements for Gibson and Keller. b. 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. Gibson Company Keller Company Sales Cost of goods sold Operating expenses Equity in earnings of Keller s (800,00e) (500,000) 300,000 60,000 $ (800,000) 500,000 100,000 84,000 Net income $ (284,000) (140,000) Retained earnings, 1/1/18 Net income (above) Dividends declared $(1,116,000) $. (284,000) 115,000 $ (1,285,000) $ (620,000) (140,000) 60,000 Retained earnings, 12/31/18 Cash Accounts receivable Inventory Investment in Keller Land Buildings and equipment (net) $ 177,0 90,000 410,000 320,000 356,000 440,000 726,000 180,000 496,000 390,000 300,000 $ 2,375,00e 1,510 Total assets Liabilities Common stock Additional paid-in capital Retained earnings, 12/31/18 480,000) (400,000) (320,000) (90,000) (1,285,000)_ 790,900) $ (2,375,000) $ (1,510,000) (610,000) Total liabilities and equities Note: Parentheses indicate a credit balance.) a. Prepare a worksheet to consolidate the separate 2018 financial statements for Gibson and Keller. b. 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