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 $480,000. At the acquisition date, the fair value of the noncontrolling interest was $320,000 and Keller's book value was $630,000. Keller had developed internally a customer list that was not recorded on its books but had an acquisition-date fair value of $170,000. 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 $80,000 on January 2, 2020, for $160,000. Keller still holds this land at the end of the current year Keller regularly transfers inventory to Gibson. In 2020, it shipped inventory costing $154,000 to Gibson at a price of $220,000. During 2021, intra-entity shipments totaled $270,000, although the original cost to Keller was only $175,500. 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 $40,000 at the end of 2021 Sales Cost of goods sold Operating expenses Equity in earnings of Keller Net income Retained earnings, 1/1/21 Net income (above) Dividends declared Retained earnings, 12/31/21 Cash Accounts receivable Inventory Investment in Keller Land Buildings and equipment (net) Total assets Liabilities Common stock Additional paid-in capital Retained earnings, 12/31/21 Total liabilities and equities Gibson Company Keller Company $ ( 87 , ) $ (570, eee) 570, eee 370, eee 170, eee 60, eee (84,000) $ (214,800) $ (148, eee) $ (1,186, 800) $ (655, eee) (214, eee) (140, eee 150, eee 60, eee $ (1,250,000) $ (735, eee) $ 176, eee $ se, eee 370, eee 480, eee 460, eee 390,000 819,000 180,000 460,00 583, eee 370, eee $ 2,508,080 $ 1,780,000 $ (598, eee) $ (585, eee (660,000) (390, eee) (70, ) (1,250,000) (735,00) $ (2,508, 800) $ (1,780, eee) Consolidation Entries Accounts Gibson Keller Debit Credit Noncontrolling Consolidated Interest Totals $ (870,000) $ (570,000) 570,000 370,000 170,000 60,000 (84,000) 0 $ (214,000) $ (140,000) Sales Cost of goods sold Operating expenses Equity in eamings of Keller Separate company net income Consolidated net income To noncontrolling interest To Gibson Company Retained earnings, 1/1/21-Gibson Retained eamings, 1/1/21-Keller Net income es $ (1,186,000) (655,000) (214,000) (140,000) 150,000 60,000 $ (1,250,000) $ (735,000) 176,000 $ 80,000 370,000 480,000 460,000 390,000 819,000 180,000 460,000 503,000 370,000 Dividends declared Retained earnings, 12/31/21 Cash Accounts receivable Inventory Investment in Keller Land Buildings and equipment (net) Customer list Total assets Liabilities Common stock Additional paid-in capital Retained earnings, 12/31/21 Noncontrolling interest 1/1/21 Noncontrolling interest 12/31/21 Total liabilities and equity $ 2,508,000 $1,780,000 $ (598,000) $ (585,000) (660,000) (390,000) (70,000) (1,250,000) (735,000) $ (2,508,000) S (1,780,000) Required A Required B How would the consolidation entries in requirement (a) have differed if Gibson had sold a building on January 2, 2020, with a $95,000 book value (cost of $210,000) to Keller for $170,000 instead of land, as the problem reports? Assume that the building had a 10-year remaining life at the date of transfer. (Do not round intermediate calculations. If no entry is required for a transaction/event, select "No journal entry required in the first account field.) Show less view transaction list Consolidation Worksheet Entries 1 2 > Prepare Entry *TA to defer the intra-entity gain as of the beginning of the year. Note: Enter debits before credits. Transaction Accounts Debit Credit Record entry Clear entry view consolidation entries 1 2 Prepare Entry ED to remove the excess depreciation for the current year created by the transfer price. Note: Enter debits before credits. Transaction Accounts Debit Credit 2 Record entry Clear entry view consolidation entries 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 $480,000. At the acquisition date, the fair value of the noncontrolling interest was $320,000 and Keller's book value was $630,000. Keller had developed internally a customer list that was not recorded on its books but had an acquisition-date fair value of $170,000. 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 $80,000 on January 2, 2020, for $160,000. Keller still holds this land at the end of the current year Keller regularly transfers inventory to Gibson. In 2020, it shipped inventory costing $154,000 to Gibson at a price of $220,000. During 2021, intra-entity shipments totaled $270,000, although the original cost to Keller was only $175,500. 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 $40,000 at the end of 2021 Sales Cost of goods sold Operating expenses Equity in earnings of Keller Net income Retained earnings, 1/1/21 Net income (above) Dividends declared Retained earnings, 12/31/21 Cash Accounts receivable Inventory Investment in Keller Land Buildings and equipment (net) Total assets Liabilities Common stock Additional paid-in capital Retained earnings, 12/31/21 Total liabilities and equities Gibson Company Keller Company $ ( 87 , ) $ (570, eee) 570, eee 370, eee 170, eee 60, eee (84,000) $ (214,800) $ (148, eee) $ (1,186, 800) $ (655, eee) (214, eee) (140, eee 150, eee 60, eee $ (1,250,000) $ (735, eee) $ 176, eee $ se, eee 370, eee 480, eee 460, eee 390,000 819,000 180,000 460,00 583, eee 370, eee $ 2,508,080 $ 1,780,000 $ (598, eee) $ (585, eee (660,000) (390, eee) (70, ) (1,250,000) (735,00) $ (2,508, 800) $ (1,780, eee) Consolidation Entries Accounts Gibson Keller Debit Credit Noncontrolling Consolidated Interest Totals $ (870,000) $ (570,000) 570,000 370,000 170,000 60,000 (84,000) 0 $ (214,000) $ (140,000) Sales Cost of goods sold Operating expenses Equity in eamings of Keller Separate company net income Consolidated net income To noncontrolling interest To Gibson Company Retained earnings, 1/1/21-Gibson Retained eamings, 1/1/21-Keller Net income es $ (1,186,000) (655,000) (214,000) (140,000) 150,000 60,000 $ (1,250,000) $ (735,000) 176,000 $ 80,000 370,000 480,000 460,000 390,000 819,000 180,000 460,000 503,000 370,000 Dividends declared Retained earnings, 12/31/21 Cash Accounts receivable Inventory Investment in Keller Land Buildings and equipment (net) Customer list Total assets Liabilities Common stock Additional paid-in capital Retained earnings, 12/31/21 Noncontrolling interest 1/1/21 Noncontrolling interest 12/31/21 Total liabilities and equity $ 2,508,000 $1,780,000 $ (598,000) $ (585,000) (660,000) (390,000) (70,000) (1,250,000) (735,000) $ (2,508,000) S (1,780,000) Required A Required B How would the consolidation entries in requirement (a) have differed if Gibson had sold a building on January 2, 2020, with a $95,000 book value (cost of $210,000) to Keller for $170,000 instead of land, as the problem reports? Assume that the building had a 10-year remaining life at the date of transfer. (Do not round intermediate calculations. If no entry is required for a transaction/event, select "No journal entry required in the first account field.) Show less view transaction list Consolidation Worksheet Entries 1 2 > Prepare Entry *TA to defer the intra-entity gain as of the beginning of the year. Note: Enter debits before credits. Transaction Accounts Debit Credit Record entry Clear entry view consolidation entries 1 2 Prepare Entry ED to remove the excess depreciation for the current year created by the transfer price. Note: Enter debits before credits. Transaction Accounts Debit Credit 2 Record entry Clear entry view consolidation entries