Question

The Individual financial statements for Gibson Company and Keller Company for the year ending December 31, 2021, follow. Gibson acquired a 60 percent Interest in Keller on January 1, 2020, In exchange for various considerations totaling $1,050,000. At the acquisition date, the fair value of the noncontrolling Interest was $700,000 and Keller's book value was $1,400,000. Keller had developed Internally a customer list that was not recorded on it poks but had an acquisition-date fair value of $350,000. This Intangible asset is being amortized over 20 years. Gibson uses ha partial equity method to account for its Investment in Keller. Gibson sold Keller land with a book value of $80,000 on January 2, 2020, for $180,000. Keller still holds this land at the end of the current year. Keller regularly transfers Inventory to Gibson. In 2020, It shipped Inventory costing $280,000 to Gibson at a price of $400,000. During 2021, Intra-entity shipments totaled $450,000, although the original cost to Keller was only $292,500. 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 2021 Gibson Company Keller Company $ (1,950, eee) $ (750, eee) 750, eee 550, eee 130, eee 80, eee (72, e8e) $ (242,00) $ (120,000) $ (1,366, eee) $ (745, eee) (242,000) (120,eee) 150,000 50,00 $ (1,458, eee) $ (815,000) $ Sales Cost of goods sold Operating expenses Equity in earnings of Keller Net income Retained earnings, 1/1/21 Net income (above) Dividends declared Retained earnings, 12/31/21 Cash Accounts receivable Inventory Investment in Keller Land Buildings and equipment (net) Total assets Liabilities Common stock Additional paid-in capital Retained earnings, 12/31/21 Total liabilities and equities 80, eee 660,000 570, eee $ 194,000 406,000 640, wee 1,119,000 220, eee 521, mee $ 3,1ee, eee $ (802,00) (840,000) 640, eee 550, eee $ 2,500, eee $ (985, eee) (610, eee) (90,000) (815, 000) $ (2,500,eee) (1,458, eee) $ (3,100,000) (Note: Parentheses Indicate a credit balance.) a. Prepare a worksheet to consolidate the separate 2021 financial statements for Gibson and Keller. b. How would the consolidation entries In requirement (a) have differed if Gibson had sold a building on January 2, 2020, with a $185,000 book value (cost of $390,000) to Keller for $350,000 Instead of land, as the problem reports? Assume that the building had a 10-year remaining life at the date of transfer. Answer is not complete.

Just need help with required A, Required B is correct

Answer 1

Mistake is mainly in Non Controlling Interest, -38000 should be mentioned in Non Controlling Interest, instaed of Earning in Equity of Keller

Further, non controlling interest on 12/31/21 is correct. An alternate presentation for the same is shown below. Answer might match by doing this as follows Changes are highlighted in Green-

Required A Consolidation Worksheet GIBSON AND KELLER Consolidation Worksheet Year Ending December 31, 2021 Consolidation entries Gibson Keller Debit Credit $ (1,050,000.00) $ (750,000.00) $ 450,000.00 $ 750,000.00 $ 550,000.00 $ 31,500.00 $ 474,000.00 $ 130,000.00 $ 80,000.00 $ 17,500.00 $ (72,000.00) $ 72,000.00 $ (242,000.00) $ (120,000.00) Non Controlling . Consolidated Totals $ (1,350,000.00) $ 857,500.00 227,500.00 $ (265,000.00 138,000.00) $ $ 38,000.00 (227,000.00) (1,241,100.00 $ (1,366,000.00) $ 124,900.00 745,000.00 $ 30,000.00 $ Accounts Revenues Cost of goods sold Other operating expenses Equity in Stark's eanings Net income Consolidated Net Income Net Income attributable to NCI To Gibson Company Retained earnings 1/1/21 Gibson Retained earnings 1/1/21 -Keller Net income Dividends declared Retained earnings 12/31/21 Cash and Account Receivable Inventory Investment in Keller Trademarks Land Buildings, and equipment (net) Patented technology Total assets Liabilities Common stock Additional paid-in capital Retained earnings 12/31/21 NClin Keller, 11 NClin Keller, 12/31 Total liabilities & stockholders' equity $ (242,000.00) $ $ 150,000.00 $ $ (1,458,000.00 $ $ $ 194,000.00 $ $ 406,000.00 $ $ 640,000.00 $ $ 1,119,000.00 20,000.00 $ $ $ $ (745,000.00 $ (120,000.00) 50,000.00 (815,000.00) 80,000.00 660,000.00 570,000.00 TITEL (227,000.00) 150,000.00 (1,318,100.00) 274,000.00 1,026,000.00 1,178,500.00 $ $ 30,000.00 $ 40,000.00 31,500.00 1,149,000.00 $ $ 100,000.00 220,000.00 $ 521,000.00 $ 640,000.00 550,000.00 $ $ 332,500.00 $ 17,500.00 $ 760,000.00 1,071,000.00 315,000.00 4,624,500.00 (1,747,000.00) (840,000.00) $ $ 3,100,000.00 $ $ (802,000.00) $ (840,000.00) $ $ $ (1,458,000.00) $ 2,500,000.00 (985,000.00) $ (610,000.00) $ (90,000.00) $ (815,000.00) 40,000.00 610,000.00 90,000.00 $ $ $ 701,400.00 (1,318,100.00) (701,400.00 (18,000.00) (4,624,500.00) (18,000.00) $ $ $ (3,100,000.00) $ (2,500,000.00 $ 2,543,400.00 $ 2,543,400.00

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