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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

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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
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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