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 $(800,000) $(500,000) Cost of goods sold 500,000 300,000 Operating expenses 100,000 60,000 Equity in earnings of Keller (84,000) 0 Net income $(284,000) $ (140,000) Retained earnings, 1/1/18 $(1,116,000) $ (620,000) Net income (above) (284,000) (140,000) Dividends declared 115,000 60,000 Retained earnings, 12/31/18 $(1,285,000) $ (700,000) Cash $177,000 $ 90,000 Accounts receivable 356,000 410,000 Inventory 440,000 320,000 Investment in Keller 726,000 0 Land 180,000 390,000 Buildings and equipment (net) 496,000 300,000 Total assets $2,375,000 $ 1,510,000 Liabilities $(480,000) $(400,000) Common stock (610,000) (320,000) Additional paid-in capital 0 (90,000) Retained earnings, 12/31/18 (1,285,000) (700,000) Total liabilities and equities $(2,375,000) $(1,510,000)

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. Short explanation for this one please.