Following are the individual financial statements for Gibson and Davis for the year ending December 31, 2024: Account Gibson Davis Sales $ (749,000) $ (421,000) Cost of goods sold 363,000 181,000 Operating expenses 240,000 82,000 Dividend income (24,000) 0 Net income $ (170,000) $ (158,000) Retained earnings, 1/1/24 $ (751,000) $ (404,000) Net income (170,000) (158,000) Dividends declared 60,000 40,000 Retained earnings, 12/31/24 $ (861,000) $ (522,000) Cash and receivables $ 287,300 $ 92,000 Inventory 562,000 183,000 Investment in Davis 569,700 0 Buildings (net) 526,000 688,000 Equipment (net) 403,000 454,000 Total assets $ 2,348,000 $ 1,417,000 Liabilities $ (857,000) $ (555,000) Common stock (630,000) (340,000) Retained earnings, 12/31/24 (861,000) (522,000) Total liabilities and stockholders' equity $ (2,348,000) $ (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. Determine the consolidated balance for each of the following accounts as of December 31, 2024: Goodwill Equipment (net) Common stock Buildings (net) Dividends declared

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 19BEA

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Following are the individual financial statements for Gibson and Davis for the year ending December 31, 2024:

Account	Gibson	Davis
Sales	$ (749,000)	$ (421,000)
Cost of goods sold	363,000	181,000
Operating expenses	240,000	82,000
Dividend income	(24,000)	0
Net income	$ (170,000)	$ (158,000)
Retained earnings, 1/1/24	$ (751,000)	$ (404,000)
Net income	(170,000)	(158,000)
Dividends declared	60,000	40,000
Retained earnings, 12/31/24	$ (861,000)	$ (522,000)
Cash and receivables	$ 287,300	$ 92,000
Inventory	562,000	183,000
Investment in Davis	569,700	0
Buildings (net)	526,000	688,000
Equipment (net)	403,000	454,000
Total assets	$ 2,348,000	$ 1,417,000
Liabilities	$ (857,000)	$ (555,000)
Common stock	(630,000)	(340,000)
Retained earnings, 12/31/24	(861,000)	(522,000)
Total liabilities and stockholders' equity	$ (2,348,000)	$ (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.

Determine the consolidated balance for each of the following accounts as of December 31, 2024:

Goodwill
Equipment (net)
Common stock
Buildings (net)
Dividends declared

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