Following are the individual financial statements for Gibson and Davis for the year ending December 31, 2021: Gibson Davis $ (731,000) $ (444,000) 334,000 197,000 67,000 Sales Cost of goods sold Operating expenses Dividend income Net income 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 256,000 (12,000) $ (153,000) $ $ (711,000) (153,000) 60,000 (804,000) 120,000 521,000 $ (180,000) (487,000) (180,000) 20,000 (647,000) 230,000 251,000 603,000 0 590,000 614,000 410,000 444,000 2,244,000 $ 1,539,000 (810,000) $ (552,000) (340,000) (630,000) (804,000) (647,000) $ (2,244,000) $ (1,539,000) Gibson acquired 60 percent of Davis on April 1, 2021, for $603,000. On that date, equipment owned by Davis (with a five-year remaining life) was overvalued by $39,000. Also on that date, the fair value of the 40 percent noncontrolling interest was $402,000. 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:
Following are the individual financial statements for Gibson and Davis for the year ending December 31, 2021: Gibson Davis $ (731,000) $ (444,000) 334,000 197,000 67,000 Sales Cost of goods sold Operating expenses Dividend income Net income 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 256,000 (12,000) $ (153,000) $ $ (711,000) (153,000) 60,000 (804,000) 120,000 521,000 $ (180,000) (487,000) (180,000) 20,000 (647,000) 230,000 251,000 603,000 0 590,000 614,000 410,000 444,000 2,244,000 $ 1,539,000 (810,000) $ (552,000) (340,000) (630,000) (804,000) (647,000) $ (2,244,000) $ (1,539,000) Gibson acquired 60 percent of Davis on April 1, 2021, for $603,000. On that date, equipment owned by Davis (with a five-year remaining life) was overvalued by $39,000. Also on that date, the fair value of the 40 percent noncontrolling interest was $402,000. 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:
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, 2021:
Gibson
Davis
$ (731,000) $ (444,000)
334,000
197,000
67,000
0
Sales
Cost of goods sold
Operating expenses
Dividend income
Net income.
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
$
$
$
$
$
256,000
(12,000)
(153,000) $ (180,000)
(711,000) $
(153,000)
60,000
(804,000) $
(487,000)
(180,000)
20,000
(647,000)
120,000 $
230,000
521,000
251,000
603,000
0
590,000
614,000
410,000
444,000
2,244,000 $ 1,539,000
(810,000)
(552,000)
(340,000)
(630,000)
(804,000)
(647,000)
$ (2,244,000) $ (1,539,000)
Gibson acquired 60 percent of Davis on April 1, 2021, for $603,000. On that date, equipment owned by Davis (with a five-year
remaining life) was overvalued by $39,000. Also on that date, the fair value of the 40 percent noncontrolling interest was $402,000.
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:
Transcribed Image Text: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.)
Consolidated Income Statement
For the Year Ending December 31, 2021
Revenues
Cost of goods sold
Operating expenses
Consolidated net income
Noncontrolling interest in CNI
Controlling interest in CNI
$ 481,750
300,400
$1,064,000
782,150
281,850
$ 281,850
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