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Following are the individual financial statements for Gibson and Davis for the year ending December 31, 2015:

Gibson Davis
  Sales $ (731,000 ) $ (444,000 )
  Cost of goods sold 334,000 197,000
  Operating expenses 256,000 67,000
  Dividend income (12,000 ) 0
  
     Net income $ (153,000 ) $ (180,000 )
  
  Retained earnings, 1/1/15 $ (711,000 ) $ (487,000 )
  Net income (153,000 ) (180,000 )
  Dividends declared 60,000 20,000
  
     Retained earnings, 12/31/15 $ (804,000 ) $ (647,000 )
  
  Cash and receivables $ 120,000 $ 230,000
  Inventory 521,000 251,000
  Investment in Davis 603,000   0
  Buildings (net) 590,000 614,000
  Equipment (net) 410,000 444,000
  
     Total assets $ 2,244,000 $ 1,539,000
  
  Liabilities $ (810,000 ) $ (552,000 )
  Common stock (630,000 ) (340,000 )
  Retained earnings, 12/31/15 (804,000 ) (647,000 )
  
     Total liabilities and stockholders' equity $ (2,244,000 ) $ (1,539,000 )
  

   Gibson acquired 60 percent of Davis on April 1, 2015, for $603,000. On that date, equipment owned by Davis (with a five-year remaining life) was overvalued by $39,000. Also on that date, the fair value of the 40 percent noncontrolling interest was $402,000. Davis earned income evenly during the year but declared the $40,000 dividend on November 1, 2015.
a.

Prepare a consolidated income statement for the year ending December 31, 2015. (Enter all amounts as positive values.)
b.

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

 

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