Following are the individual financial statements for Gibson and Davis for the year ending December 31, 2024: Account Sales Cost of goods sold Operating expenses Dividend income Net income Retained earnings, 1/1/24 Net income Dividends declared Retained earnings, 12/31/24 Cash and receivables Inventory Investment in Davis Buildings (net) Equipment (net) Total assets Liabilities Common stock Retained earnings, 12/31/24 Total liabilities and stockholders' equity Gibson $ (742,000) 327,808 247,808 (12,000) $ (188,000) Goodwill Equipment (net) Common stock Buildings (net) Dividends declared $ (798,000) (180,000) 78,000 $ (988,eee) $ 211,950 545,808 622,858 617,808 482,000 $ 2,398,000 $ (860,000) (630,000) (908,000) $ (2,398,000) Davis $ (499,808) 236,000 64,000 $ (199,000) $ (481,000) (199,000) 20,000 $ (668,000) $ 85,000 276,000 e 679,888 486,000 $ 1,526,000 $ (526,000) (348,000) (660,000) $ (1,526,000) Gibson acquired 60 percent of Davis on April 1, 2024, for $622,050. On that date, equipment owned by Davis (with a five-year remaining life) was overvalued by $54,000. Also on that date, the fair value of the 40 percent noncontrolling interest was $414,700. Davis earned income evenly during the year but declared the $20,000 dividend on November 1, 2024. Required: a. Prepare a consolidated income statement for the year ending December 31, 2024. b. Determine the consolidated balance for each of the following accounts as of December 31, 2024:
Following are the individual financial statements for Gibson and Davis for the year ending December 31, 2024: Account Sales Cost of goods sold Operating expenses Dividend income Net income Retained earnings, 1/1/24 Net income Dividends declared Retained earnings, 12/31/24 Cash and receivables Inventory Investment in Davis Buildings (net) Equipment (net) Total assets Liabilities Common stock Retained earnings, 12/31/24 Total liabilities and stockholders' equity Gibson $ (742,000) 327,808 247,808 (12,000) $ (188,000) Goodwill Equipment (net) Common stock Buildings (net) Dividends declared $ (798,000) (180,000) 78,000 $ (988,eee) $ 211,950 545,808 622,858 617,808 482,000 $ 2,398,000 $ (860,000) (630,000) (908,000) $ (2,398,000) Davis $ (499,808) 236,000 64,000 $ (199,000) $ (481,000) (199,000) 20,000 $ (668,000) $ 85,000 276,000 e 679,888 486,000 $ 1,526,000 $ (526,000) (348,000) (660,000) $ (1,526,000) Gibson acquired 60 percent of Davis on April 1, 2024, for $622,050. On that date, equipment owned by Davis (with a five-year remaining life) was overvalued by $54,000. Also on that date, the fair value of the 40 percent noncontrolling interest was $414,700. Davis earned income evenly during the year but declared the $20,000 dividend on November 1, 2024. Required: a. Prepare a consolidated income statement for the year ending December 31, 2024. b. Determine the consolidated balance for each of the following accounts as of December 31, 2024:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Following are the individual financial statements for Gibson and Davis for the year ending December 31, 2024:
Sales
Cost of goods sold
Operating expenses
Dividend income
Net income
Retained earnings, 1/1/24
Net income
Dividends declared
Retained earnings, 12/31/24
Cash and receivables
Inventory
Investment in Davis
Buildings (net)
Equipment (net)
Total assets
Liabilities
Common stock
Retained earnings, 12/31/24
Total liabilities and stockholders' equity
Goodwill
Equipment (net)
Common stock
Buildings (net)
Dividends declared
Account
Required A Required B
Goodwill
Equipment (net)
Common stock
Gibson
$ (742,000)
327,808
247,808
(12,800)
$ (180,000)
$ (798,088)
(180,000)
78,000
$ (988,000)
Complete this question by entering your answers in the tabs below.
Buildings (net)
Dividends declared
$ 211,958
545,000
622,050
617,208
402,000
$ 2,398,000
$ (860,000)
(630,000)
(988,000)
$ (2,398,000)
< Required A
Gibson acquired 60 percent of Davis on April 1, 2024, for $622,050. On that date, equipment owned by Davis (with a five-year
remaining life) was overvalued by $54,000. Also on that date, the fair value of the 40 percent noncontrolling interest was $414,700.
Davis earned income evenly during the year but declared the $20,000 dividend on November 1, 2024.
Required:
a. Prepare a consolidated income statement for the year ending December 31, 2024.
b. Determine the consolidated balance for each of the following accounts as of December 31, 2024:
Davis
$ (499,000)
236,000
64,000
$ (199,808)
$ (481,000)
(199,000)
20,000
$ (668,000)
Required B >
$ 85,000
276,080
Determine the consolidated balance for each of the following accounts as of December 31, 2024:
679,000
486,080
$ 1,526,080
$ (526,000)
(340,000)
(668,808)
$ (1,526,000)
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