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 Account 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 $ (749,000) 363,000 240,000 (24,000) $ (170,000) $ (751,000) (170,000) 60,000 $ (861,000) $ 287,300 562,000 569,700 526,000 403,000 $ 2,348,000 $ (857,000) (630,000) (861,000) $ (2,348,000) Davis $ (421,000) 181,000 82,000 $ (158,000) $ (404,000) (158,000) 40,000 $ (522,000) $ 92,000 183,000 Ө 688,000 454,000 $ 1,417,000 $ (555,000) (340,000) (522,000) $ (1,417,000) Gibson acquired 60 percent of Davis on April 1, 2024, for $569,700. On that date, equipment owned by Davis (with a five-year remaining life) was overvalued by $63,000. Also on that date, the fair value of the 40 percent noncontrolling Interest was $379,800. Davis earned Income evenly during the year but declared the $40,000 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: Sales Cost of goods sold Operating expenses Dividend income Net income Retained earnings, 1/1/24 Net income Dividends declared Account 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 $ (749,000) 363,000 240,000 (24,000) $ (170,000) $ (751,000) (170,000) 60,000 $ (861,000) $ 287,300 562,000 569,700 526,000 403,000 $ 2,348,000 $ (857,000) (630,000) (861,000) $ (2,348,000) Davis $ (421,000) 181,000 82,000 $ (158,000) $ (404,000) (158,000) 40,000 $ (522,000) $ 92,000 183,000 Ө 688,000 454,000 $ 1,417,000 $ (555,000) (340,000) (522,000) $ (1,417,000) Gibson acquired 60 percent of Davis on April 1, 2024, for $569,700. On that date, equipment owned by Davis (with a five-year remaining life) was overvalued by $63,000. Also on that date, the fair value of the 40 percent noncontrolling Interest was $379,800. Davis earned Income evenly during the year but declared the $40,000 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
Account
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
$ (749,000)
363,000
240,000
(24,000)
$ (170,000)
$ (751,000)
(170,000)
60,000
$ (861,000)
$ 287,300
562,000
569,700
526,000
403,000
$ 2,348,000
$ (857,000)
(630,000)
(861,000)
$ (2,348,000)
Davis
$ (421,000)
181,000
82,000
$ (158,000)
$ (404,000)
(158,000)
40,000
$ (522,000)
$ 92,000
183,000
Ө
688,000
454,000
$ 1,417,000
$ (555,000)
(340,000)
(522,000)
$ (1,417,000)
Gibson acquired 60 percent of Davis on April 1, 2024, for $569,700. On that date, equipment owned by Davis (with a five-year
remaining life) was overvalued by $63,000. Also on that date, the fair value of the 40 percent noncontrolling Interest was $379,800.
Davis earned Income evenly during the year but declared the $40,000 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:
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