The individual financial statements for Gibson Company and Keller Company for the year ending December 31, 2015, follow. Gibson acquired a 60 percent interest in Keller on January 1, 2014, in exchange for various considerations totaling $690,000. At the acquisition date, the fair value of the noncontrolling interest was $460,000 and Kellers book value was $920,000. Keller had developed internally a customer list that was not recorded on its books but had an acquisition-date fair value of $230,000. This intangible asset is being amortized over 20 years.

Gibson sold Keller land with a book value of $65,000 on January 2, 2014, for $140,000. Keller still holds this land at the end of the current year.

Keller regularly transfers inventory to Gibson. In 2014, it shipped inventory costing $196,000 to Gibson at a price of $280,000. During 2015, intra-entity shipments totaled $330,000, although the original cost to Keller was only $214,500. 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 $70,000 at the end of 2015.

	Gibson Company			Keller Company
Sales	$	(930,000	)	$	(630,000	)
Cost of goods sold		630,000			430,000
Operating expenses		120,000			90,000
Equity in earnings of Keller Company		(66,000	)		0
Net income	$	(246,000	)	$	(110,000	)
Retained earnings, 1/1/15	$	(1,246,000	)	$	(685,000	)
Net income (above)		(246,000	)		(110,000	)
Dividends declared		135,000			35,000
Retained earnings, 12/31/15	$	(1,357,000	)	$	(760,000	)
Cash	$	182,000		$	90,000
Accounts receivable		382,000			540,000
Inventory		520,000			450,000
Investment in Keller Company		918,000			0
Land		240,000			520,000
Buildings and equipment (net)		509,000			430,000
Total assets	$	2,751,000		$	2,030,000
Liabilities	$	(674,000	)	$	(730,000	)
Common stock		(720,000	)		(450,000	)
Additional paid-in capital		0			(90,000	)
Retained earnings, 12/31/15		(1,357,000	)		(760,000	)
Total liabilities and equities	$	(2,751,000	)	$	(2,030,000	)

(Note: Parentheses indicate a credit balance.)

a.

Prepare a worksheet to consolidate the separate 2015 financial statements for Gibson and Keller. (For accounts where multiple consolidation entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet.)

b.

How would the consolidation entries in requirement (a) have differed if Gibson had sold a building with a $125,000 book value (cost of $270,000) to Keller for $230,000 instead of land, as the problem reports? Assume that the building had a 10-year remaining life at the date of transfer. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Year Ending December 31, 2015 Consolidation Entries Noncontrolling Consolidated Accounts Gibson Keller Debit Interest Totals s (930,000) 630,000 120,000 (66,000) (630,000) 430,000 90,000 $ (1,230,000) 736,300 221,500 330,000 es Cost of goods sold Operating expenses Equity in earnings of Keller Separate company net income Consolidated net income 346,800 11.500 66.000 S (246,000)S (110,000) $ (272,200) 36.880 S (235,320) (1,154,020) To noncontrolling interest 36.880 Retained earnings, 1/1/15-Gibson Retained earnings, 1/1/15-Keller Net income Dividends declared $. (1246.000) 685,000 (685,000) (110,000) 35,000 S (1,357,000)S (760,000) 90,000 540,000 450,000 (235,320) 135,000 S (1,254,340) S 272,000 852,000 946,900 (246,000) 135,000 21,000 14.000 Retained earnings, 12/31/15 $ 182,000$ Accounts receivable Inventory Investment in Keller Land Buildings and equipment (net) Customer list 382,000 520,000 918,000 240,000 509,000 70,000 21.000 939,000 520,000 430,000 75,000 685,000 939,000 207,000 $ 3,901,900 S (1,334,000) (720,000) 218,500 11,500 lotal assets Liabilities Common stock Additional paid-in capital Retained earnings, 12/31/15 NCI in Keller, 1/1/15 NCI in Keller, 12/31/15 $ 2,751,000S 2,030,000 S (674,000)S (730,000) (450,000) (90,000) (760,000) 70,000 450,000 90,000 (720,000) (1,357,000) (1,254,340) (570,608) (593,488) (593,488) $ (3,901,828) Total liabilities and equity S (2,751,000) S (2,030,000) 2,057,080 1,486,400 Year Ending December 31, 2015 Consolidation Entries Noncontrolling Consolidated Accounts Gibson Keller Debit Interest Totals s (930,000) 630,000 120,000 (66,000) (630,000) 430,000 90,000 $ (1,230,000) 736,300 221,500 330,000 es Cost of goods sold Operating expenses Equity in earnings of Keller Separate company net income Consolidated net income 346,800 11.500 66.000 S (246,000)S (110,000) $ (272,200) 36.880 S (235,320) (1,154,020) To noncontrolling interest 36.880 Retained earnings, 1/1/15-Gibson Retained earnings, 1/1/15-Keller Net income Dividends declared $. (1246.000) 685,000 (685,000) (110,000) 35,000 S (1,357,000)S (760,000) 90,000 540,000 450,000 (235,320) 135,000 S (1,254,340) S 272,000 852,000 946,900 (246,000) 135,000 21,000 14.000 Retained earnings, 12/31/15 $ 182,000$ Accounts receivable Inventory Investment in Keller Land Buildings and equipment (net) Customer list 382,000 520,000 918,000 240,000 509,000 70,000 21.000 939,000 520,000 430,000 75,000 685,000 939,000 207,000 $ 3,901,900 S (1,334,000) (720,000) 218,500 11,500 lotal assets Liabilities Common stock Additional paid-in capital Retained earnings, 12/31/15 NCI in Keller, 1/1/15 NCI in Keller, 12/31/15 $ 2,751,000S 2,030,000 S (674,000)S (730,000) (450,000) (90,000) (760,000) 70,000 450,000 90,000 (720,000) (1,357,000) (1,254,340) (570,608) (593,488) (593,488) $ (3,901,828) Total liabilities and equity S (2,751,000) S (2,030,000) 2,057,080 1,486,400