The individual financial statements for Gibson Company and Keller Company for the year ending December 3 1
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Question:
The individual financial statements for Gibson Company and Keller Company for the year ending December follow. Gibson acquired a percent interest in Keller on January in exchange for various considerations totaling $ At the acquisition date, the fair value of the noncontrolling interest was $ and Kellers book value was $ Keller had developed internally a customer list that was not recorded on its books but had an acquisitiondate fair value of $ This intangible asset is being amortized over years. Gibson uses the partial equity method to account for its investment in Keller.
Gibson sold Keller land with a book value of $ on January for $ Keller still holds this land at the end of the current year.
Keller regularly transfers inventory to Gibson. In it shipped inventory costing $ to Gibson at a price of $ During intraentity shipments totaled $ although the original cost to Keller was only $ In each of these years, percent of the merchandise was not resold to outside parties until the period following the transfer. Gibson owes Keller $ at the end of Gibson Company Keller Company
Sales $ $
Cost of goods sold
Operating expenses
Equity in earnings of Keller
Net income $ $
Retained earnings, $ $
Net income above
Dividends declared
Retained earnings, $ $
Cash $ $
Accounts receivable
Inventory
Investment in Keller
Land
Buildings and equipment net
Total assets $ $
Liabilities $ $
Common stock
Additional paidin capital
Retained earnings,
Total liabilities and equities $ $
Note: Parentheses indicate a credit balance.
Prepare a worksheet to consolidate the separate financial statements for Gibson and Keller.
How would the consolidation entries in requirement a have differed if Gibson had sold a building on January with a $ book value cost of $ to Keller for $ instead of land, as the problem reports? Assume that the building had a year remaining life at the date of transfer.How would the consolidation entries in requirement a have differed if Gibson had sold a building on January with a $ book value cost of $ to Keller for $ instead of land, as the problem reports? Assume that the building had a year remaining life at the date of transfer. Do not round intermediate calculations. If no entry is required for a transactionevent select No journal entry required" in the first account field.
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