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

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

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) $

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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Related Book For  answer-question

Advanced Accounting

ISBN: 9781260247824

14th Edition

Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupnik

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