Following are the individual financial statements for Gibson and Davis for the year ending December 31, 2021:

Gibson acquired 60 percent of Davis on April 1, 2021, for $528,000. On that date, equipment owned by Davis (with a five-year remaining life) was overvalued by $30,000. Also on that date, the fair value of the 40 percent noncontrolling interest was $352,000. Davis earned income evenly during the year but declared the $40,000 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                         Buildings (net)

Equipment (net)             Dividends Declared

Common Stock

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Gibson Davis $ (600,000) 300,000 174,000 $ (300,000) 140,000 60,000 Sales Cost of goods sold Operating expenses Dividend income. (24,000) $ (150,000) $ (700,000) (150,0000) 80,000 -0- Net income.. $ (100,000 $ (400,000) (100,000) 40,000 $ (460,000) $ 100,000 190,000 Retained earnings, 1/1/21. Net income.... Dividends declared. $ (770,000) $ 248,000 Retained earnings, 12/31/21 Cash and receivables.. Inventory. Investment in Davis. Buildings (net) 500,000 528,000 -0 600,000 400,000 $ 1,290,000 (490,000) (340,000) (460,000 $(1.290,000) 524,000 Equipment (net) 400,000 Total assets $2,200,000 Liabilities.. (800,000) (630,000) (770,000) $(2,200,000) Common stock Retained earnings, 12/31/21 Total liabilities and stockholders' equity.