Following are the individual financial statements for Gibson and Davis for the year ending December 31, 2021: Gibson (741,000) $ 333,000 175,000 (12,000) (245,000) $ Sales Cost of goods sold Operating expenses Dividend incone Net incone Retained earnings, 1/1/21 Net income Dividends declared Retained earnings, 12/31/21 Cash and receivables Inventory Investment in Davis Buildings (net) Equipment (net) Total assets Liabilities Common stock Retained earnings, 12/31/21 Total liabilities and stockholders' equity $ $ $ $ $ $ $ (799,000) $ (245,000) 50,000 (994,000) 392,050 543,000 556,950 549,000 412,000 2,453,000 (829,000) (630,000) (994,000) $ (2,453,000) Davis (447,000) 196,000 62,000 0 (189,000) (427,000) (189,000) 20,000 $ (596,000) $ 198,000 211,000 0 629,000 451,000 $ 1,489,000 $ (553,000) (340,000). (596,000) $ (1,489,000) Gibson acquired 60 percent of Davis on April 1, 2021, for $556,950. On that date, equipment owned by Davis (with a five-year remaining life) was overvalued by $42.000. Also on that date, the fair value of the 40 percent noncontrolling interest was $371,300. Davis earned Income evenly during the year but declared the $20.000 dividend on November 1, 2021

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question
Following are the individual financial statements for Gibson and Davis for the year ending December 31, 2021:
Sales
Cost of goods sold
Operating expenses
Dividend income
Net incone
Retained earnings, 1/1/21
Net income
Dividends declared
Retained earnings, 12/31/21
Cash and receivables
Inventory
Investment in Davis
Buildings (net)
Equipment (net)
Total assets
Liabilities
Common stock
Retained earnings, 12/31/21
Total liabilities and stockholders'
equity
$
$
$
$
S
Gibson
(741,000)
333,000
175,000
(12,000)
(245,000) $ (189,000)
$
$
$
(799,000) $
(245,000)
50,000
(994,000) $
392,050
$
543,000
556,950
e
549,000
629,000
412,000
451,000
2,453,000 $ 1,489,000
(829,000) $
(630,000)
(994,000)
$ (2,453,000)
Davis
(447,000)
196,000
62,000
0
(427,000)
(189,000)
20,000
(596,000)
198,000
211,000
(553,000)
(340,000)
(596,000)
$ (1,489,000)
Gibson acquired 60 percent of Davis on April 1, 2021, for $556,950. On that date, equipment owned by Davis (with a five-year
remaining life) was overvalued by $42.000. Also on that date, the fair value of the 40 percent noncontrolling interest was $371,300.
Davis earned Income evenly during the year but declared the $20,000 dividend on November 1, 2021.
Transcribed Image Text:Following are the individual financial statements for Gibson and Davis for the year ending December 31, 2021: Sales Cost of goods sold Operating expenses Dividend income Net incone Retained earnings, 1/1/21 Net income Dividends declared Retained earnings, 12/31/21 Cash and receivables Inventory Investment in Davis Buildings (net) Equipment (net) Total assets Liabilities Common stock Retained earnings, 12/31/21 Total liabilities and stockholders' equity $ $ $ $ S Gibson (741,000) 333,000 175,000 (12,000) (245,000) $ (189,000) $ $ $ (799,000) $ (245,000) 50,000 (994,000) $ 392,050 $ 543,000 556,950 e 549,000 629,000 412,000 451,000 2,453,000 $ 1,489,000 (829,000) $ (630,000) (994,000) $ (2,453,000) Davis (447,000) 196,000 62,000 0 (427,000) (189,000) 20,000 (596,000) 198,000 211,000 (553,000) (340,000) (596,000) $ (1,489,000) Gibson acquired 60 percent of Davis on April 1, 2021, for $556,950. On that date, equipment owned by Davis (with a five-year remaining life) was overvalued by $42.000. Also on that date, the fair value of the 40 percent noncontrolling interest was $371,300. Davis earned Income evenly during the year but declared the $20,000 dividend on November 1, 2021.
Gibson acquired 60 percent of Davis on April 1, 2021, for $556,950. On that date, equipment owned by Davis (with a five-year
remaining life) was overvalued by $42,000. Also on that date, the fair value of the 40 percent noncontrolling interest was $371,300.
Davis earned income evenly during the year but declared the $20,000 dividend on November 1, 2021.
a. Prepare a consolidated income statement for the year ending December 31, 2021.
b. Determine the consolidated balance for each of the following accounts as of December 31, 2021
Goodwill
Equipment (net)
Common stock
Buildings (net)
Dividends declared
Complete this question by entering your answers in the tabs below.
Required A Required B
Prepare a consolidated income statement for the year ending December 31, 2021. (Enter all amounts as positive values.)
Panelidated inname Statement
Transcribed Image Text:Gibson acquired 60 percent of Davis on April 1, 2021, for $556,950. On that date, equipment owned by Davis (with a five-year remaining life) was overvalued by $42,000. Also on that date, the fair value of the 40 percent noncontrolling interest was $371,300. Davis earned income evenly during the year but declared the $20,000 dividend on November 1, 2021. a. Prepare a consolidated income statement for the year ending December 31, 2021. b. Determine the consolidated balance for each of the following accounts as of December 31, 2021 Goodwill Equipment (net) Common stock Buildings (net) Dividends declared Complete this question by entering your answers in the tabs below. Required A Required B Prepare a consolidated income statement for the year ending December 31, 2021. (Enter all amounts as positive values.) Panelidated inname Statement
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 4 steps

Blurred answer
Knowledge Booster
Accounting Changes and Error Analysis
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education