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The individual financial statements for Gibson Company and Keller Company for the year ending December...

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Accounting

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 $750,000. At the acquisition date, the fair value of the noncontrolling interest was $500,000 and Kellers book value was $1,000,000. Keller had developed internally a customer list that was not recorded on its books but had an acquisition-date fair value of $250,000. This intangible asset is being amortized over 20 years. Gibson uses the partial equity method to account for its investment in Keller.
Gibson sold Keller land with a book value of $75,000 on January 2,2020, for $160,000. Keller still holds this land at the end of the current year.
Keller regularly transfers inventory to Gibson. In 2020, it shipped inventory costing $180,000 to Gibson at a price of $300,000. During 2021, intra-entity shipments totaled $350,000, although the original cost to Keller was only $245,000. 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 $35,000 at the end of 2021.

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