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 O Cash and receivables Inventory Investment in Davis Buildings (net) Equipment (net) Total assets Account Liabilities Common stock Retained earnings, 12/31/24 Total liabilities and stockholders' equity Gibson $ (718,000) 332,000 214,000 (24,000) $ (196,000) $ (705,000) (196,000) 60,000 $ (841,000) $ 228,500 504,000 511,500 538,000 494,000 $ 2,276,000 $ (805,000) (630,000) (841,000) $ (2,276,000) Davis $ (355,000) 150,000 75,000 0 $ (130,000) $ (410,000) (130,000) 40,000 $ (500,000) $ 133,000 137,000 0 610,000 494,000 $ 1,374,000 $ (534,000) (340,000) (500,000) $ (1,374,000) Gibson acquired 60 percent of Davis on April 1, 2024, for $511,500. On that date, equipment owned by Davis (with a five-year
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 O Cash and receivables Inventory Investment in Davis Buildings (net) Equipment (net) Total assets Account Liabilities Common stock Retained earnings, 12/31/24 Total liabilities and stockholders' equity Gibson $ (718,000) 332,000 214,000 (24,000) $ (196,000) $ (705,000) (196,000) 60,000 $ (841,000) $ 228,500 504,000 511,500 538,000 494,000 $ 2,276,000 $ (805,000) (630,000) (841,000) $ (2,276,000) Davis $ (355,000) 150,000 75,000 0 $ (130,000) $ (410,000) (130,000) 40,000 $ (500,000) $ 133,000 137,000 0 610,000 494,000 $ 1,374,000 $ (534,000) (340,000) (500,000) $ (1,374,000) Gibson acquired 60 percent of Davis on April 1, 2024, for $511,500. On that date, equipment owned by Davis (with a five-year
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
9
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
Account
Goodwill
Equipment (net)
Common stock
Buildings (net)
Dividends declared
Gibson acquired 60 percent of Davis on April 1, 2024, for $511,500. On that date, equipment owned by Davis (with a five-year
remaining life) was overvalued by $75,000. Also on that date, the fair value of the 40 percent noncontrolling interest was $341,000.
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:
Required A Required B
Complete this question by entering your answers in the tabs below.
Sales
Cost of goods sold
Operating expenses
Consolidated net income
Gibson
$ (718,000)
332,000
214,000
(24,000)
$ (196,000)
$ (705,000)
(196,000)
60,000
$ (841,000)
$ 228,500
504,000
511,500
538,000
494,000
$ 2,276,000
$ (805,000)
(630,000)
(841,000)
$ (2,276,000)
X Answer is complete but not entirely correct.
Prepare a consolidated income statement for the year ending December 31, 2024.
Note: Enter all amounts as positive values.
Consolidated Income Statement
For the Year Ending December 31, 2024
Noncontrolling interest in consolidated net income
Controlling interest in consolidated net income
$
< Required A
444,500
259,000
$
$
984,250
703,500
280,750
$ (130,000)
$ (410,000)
(130,000)
40,000
$ (500,000)
$ 133,000
137,000
0
610,000
494,000
$ 1,374,000
$ (534,000)
(340,000)
(500,000)
$ (1,374,000)
Davis
$ (355,000)
150,000
75,000
0
52,000 X
228,750
Required B
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