The individual financial statements for Gibson Company and Keller Company for the year ending December 31, 2011, follow. Gibson acquired a 60 percent interest in Keller on January 1, 2010, in exchange for various considerations totaling $570,000. At the acquisition date, the fair value of the noncontrolling interest was $380,000 and Keller€™s book value was $850,000. Keller had developed internally a customer list that was not recorded on its books but had an acquisition-date fair value of $100,000. This intangible asset is being amortized over 20 years.
Gibson sold Keller land with a book value of $60,000 on January 2, 2010, for $100,000. Keller still holds this land at the end of the current year. Keller regularly transfers inventory to Gibson. In 2010, it shipped inventory costing $100,000 to Gibson at a price of $150,000. During 2011, intra-entity shipments totaled $200,000, although the original cost to Keller was only $140,000. In each of these years, 20 percent of the merchandise was not resold to outside parties until the period following the transfer. Gibson owes Keller $40,000 at the end of 2011.

a. Prepare a worksheet to consolidate the separate 2011 financial statements for Gibson and Keller.
b. How would the consolidation entries in requirement (a) have differed if Gibson had sold a building with a $60,000 book value (cost of $140,000) to Keller for $100,000 instead of land, as the problem reports? Assume that the building had a 10-year remaining life at the date oftransfer.

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Gibson Company Keller Company $ (800,000) S (500,000) 300,000 60,000 Cost of goods sold Operating expenses Income of Keller Company 500,000 100,000 (84,000) Net income Retained earnings, 1/1/11. Net income (above) Dividends paid S (284,000) 140,000) $(1.116,000) $ (620,000) (140,000) 60,000 (284,000) 115,000 Retained earnings, 12/31/11 Cash Accounts receivable Inventory Investment in Keller Company $1,285,000 700,000) $ 177,000 90,000 410,000 320,000 356,000 440,000 726,000 180,000 496,000 390,000 300,000 Buildings and equipment (net) . _ . . . . Total assets. Liabilities Common stock Additional paid-in capital Retained earnings, 12/31/11 $2.375,000 1,510,000 $ (480,000) (400,000) (320,000) (90,000) (700,000) (610,000) (1,285,000) Total liabilities and equities $2,375,000) $1510,000)