Problem $4-36($Algo$)($LO $4-1,4-4,4-8)$

Following are the individual financial statements for Gibson and Davis for the year ending December $31,2024$:

Gibson acquired $60$ percent of Davis on April $1,2024,$ for $$583,800.$ On that date, equipment owned by Davis $($with a five$-$year

remaining life$)$ was overvalued by $$60,000.$ Also on that date, the fair value of the $40$ percent noncontrolling interest was $$389,200.$

Davis earned income evenly during the year but declared the $$30,000$ dividend on November $1,2024.$

Requlred:

Q$.$ Prepare a consolidated income statement for the year ending December $31,2024.$

b$.$ Determine the consolidated balance for each of the following accounts as of December $31,2024$:

Goodwill

Equipment $($net$)$

Common stock

Buildings $($net$)$

Dividends declared

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Prepare a consolidated income statement for the year ending December $31,2024.$

Note: Enter all amounts as positive values.Problem $4-36($Algo$)($LO $4-1,4-4,4-8)$

Following are the individual financial statements for Gibson and Davis for the year ending December $31,2024$:

Account Gibson Davis

Sales $ $(666,000)$ $ $(398,000)$

Cost of goods sold $308,000177,000$

Operating expenses $181,00061,000$

Dividend income $(18,000)0$

Net income $ $(195,000)$ $ $(160,000)$

Retained earnings, $1/1/24$ $ $(760,000)$ $ $(415,000)$

Net income $(195,000)(160,000)$

Dividends declared $70,00030,000$

Retained earnings, $12/31/24$ $ $(885,000)$ $ $(545,000)$

Cash and receivables $ $306,200$ $ $148,000$

Inventory $512,000113,000$

Investment in Davis $583,8000$

Buildings $($net$)545,000632,000$

Equipment $($net$)455,000496,000$

Total assets $ $2,402,000$ $ $1,389,000$

Liabilities $ $(887,000)$ $ $(504,000)$

Common stock $(630,000)(340,000)$

Retained earnings, $12/31/24(885,000)(545,000)$

Total liabilities and stockholders' equity $ $(2,402,000)$ $ $(1,389,000)$

Gibson acquired $60$ percent of Davis on April $1,2024,$ for $$583,800.$ On that date, equipment owned by Davis $($with a five$-$year remaining life$)$ was overvalued by $$60,000.$ Also on that date, the fair value of the $40$ percent noncontrolling interest was $$389,200.$ Davis earned income evenly during the year but declared the $$30,000$ dividend on November $1,2024.$

Required:

Prepare a consolidated income statement for the year ending December $31,2024.$

Determine the consolidated balance for each of the following accounts as of December $31,2024$:

Goodwill

Equipment $($net$)$

Common stock

Buildings $($net$)$

Dividends declared