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 $900,000. At the acquisition date, the fair value of the noncontrolling interest was $600,000 and Kellers book value was $1,200,000. Keller had developed internally a customer list that was not recorded on its books but had an acquisition-date fair value of $300,000. 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 $55,000 on January 2, 2020, for $130,000. Keller still holds this land at the end of the current year.

Keller regularly transfers inventory to Gibson. In 2020, it shipped inventory costing $227,500 to Gibson at a price of $350,000. During 2021, intra-entity shipments totaled $400,000, although the original cost to Keller was only $240,000. 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 $60,000 at the end of 2021.

	Gibson Company				Keller Company
Sales	$	(1,000,000	)		$	(700,000	)
Cost of goods sold		700,000				500,000
Operating expenses		190,000				55,000
Equity in earnings of Keller		(87,000	)			0
Net income	$	(197,000	)		$	(145,000	)
Retained earnings, 1/1/21	$	(1,316,000	)		$	(720,000	)
Net income (above)		(197,000	)			(145,000	)
Dividends declared		125,000				70,000
Retained earnings, 12/31/21	$	(1,388,000	)		$	(795,000	)
Cash	$	189,000			$	60,000
Accounts receivable		396,000				610,000
Inventory		590,000				520,000
Investment in Keller		1,017,000				0
Land		170,000				590,000
Buildings and equipment (net)		516,000				500,000
Total assets	$	2,878,000			$	2,280,000
Liabilities	$	(700,000	)		$	(885,000	)
Common stock		(790,000	)			(520,000	)
Additional paid-in capital		0				(80,000	)
Retained earnings, 12/31/21		(1,388,000	)			(795,000	)
Total liabilities and equities	$	(2,878,000	)		$	(2,280,000	)

(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 $160,000 book value (cost of $340,000) to Keller for $300,000 instead of land, as the problem reports? Assume that the building had a 10-year remaining life at the date of transfer.