Student Name:
Class:
Problem 05-35
Part A.
Remaining
Life in
years
Consideration transferred
Noncontrolling interest fair value
Subsidiary fair value at acquisition-date
Book value
Fair value in excess of book value
Excess fair value assignment
to customer list
Consolidation entries:
Entry
Entry
Entry
Entry
Entry
Annual
Excess
Amort.
Entry
Entry
Entry
Entry
Entry
Entry
Net income attributable to noncontrolling interest
Keller reported net income
Excess fair value amortization
2017 intra-entity gross profit recognized in 2018
2018 intra-entity gross profit deferred
Keller realized income 2018
Outside ownership percentage
Net income attributable to n noncontrolling interest
GIBSON AND KELLER
Consolidation Worksheet
Year Ending December 31, 2018
NonConsolidation Entries
Accounts
Gibson
Keller
Debit
Sales
(800,000)
(500,000)
Cost of goods sold
500,000
300,000
Operating expenses
100,000
60,000
Equity in earnings of Keller
Separate company net income
(84,000)
(284,000)
(140,000)
–
–
Credit
controlling
Consolidated
Interest
Totals
Consolidated net income
To noncontrolling interest
To Gibson
Retained earnings, 1/1
– Gibson
(1,116,000)
– Keller
(620,000)
Net Income
(284,000)
Dividends
115,000
60,000
(1,285,000)
(700,000)
Retained earnings, 12/31
(140,000)
Cash
177,000
90,000
Accounts receivable
356,000
410,000
Inventory
440,000
320,000
Investment in Keller
726,000
Land
180,000
390,000
Buildings and equipment (net)
496,000
300,000
Customer list
Total assets
2,375,000
1,510,000
Liabilities
(480,000)
(400,000)
Common stock
(610,000)
(320,000)
(1,285,000)
(700,000)
(2,375,000)
(1,510,000)
Additional paid-in capital
Retained earnings, 12/31
(90,000)
Noncontrolling interest in
NCI in Keller, 1/1
NCI in Keller, 12/31
Total liabilities and equity
Part b. How would the consolidation entries in requirement (a) have differed if Gibson had sold a building with a $600,000
book value (cost of $140,000) to Keller for $100,000 instead of land, as the problem reports?
Entry
Entry
Given Data P05-35
Part a. facts:
Gibson acquired interest in Keller 1/1/2017
Various considerations given for acquisition
Fair value of noncontrolling interest at acquisition
Keller’s book value
Value assigned to Keller customer list
Keller customer list – life for purposes of amortization
Book value of land Gibson sold to Keller on 1/2/2017
Price paid by Keller for Gibson’s land
Cost of inventory shipped by Keller to Gibson in 2017
Price paid by Gibson for 2017 inventory
Cost of intra-entity shipments by Keller to Gibson in 2018
Price paid by Gibson for 2018 intra-entity shipments
Percentage of inventory not resold in period following transfer
Amount Gibson owes Keller at end of 2018
Part b. facts:
Building sold to Keller instead of land
Book value of building Gibson sold to Keller
Price paid by Keller for Gibson building
Cost of building
Remaining life at date of transfer
$
$
$
$
$
$
$
$
$
$
$
$
$
$
60%
570,000
380,000
850,000
100,000
20
60,000
100,000
100,000
150,000
140,000
200,000
20%
40,000
60,000
100,000
140,000
10
Sales
Cost of goods sold
Operating expenses
Equity in earnings of Keller
Net income
Gibson
Keller
Company
Company
$ (800,000) $ (500,000)
500,000
300,000
100,000
60,000
(84,000)
$ (284,000) $ (140,000)
Retained earnings, 1/1/18
Net income
Dividends declared
Retained earnings, 12/31/18
$ (1,116,000) $
(284,000)
115,000
$ (1,285,000) $
Cash
Accounts receivable
Inventory
Investment in Keller
Land
Buildings and equipment (net)
Total assets
$
Liabilities
Common stock
Additional paid-in capital
Retained earnings, 12/31/18
Total liabilities and equities
$
177,000
356,000
440,000
726,000
180,000
496,000
$ 2,375,000
(620,000)
(140,000)
60,000
(700,000)
$
90,000
410,000
320,000
390,000
300,000
$ 1,510,000
(480,000) $ (400,000)
(610,000)
(320,000)
(90,000)
(1,285,000)
(700,000)
$ (2,375,000) $ (1,510,000)
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