Accounting for Business Entities: Fall 2015ASSIGNMENT 2Save & Exit SubmitQuestion 1 (of…

Accounting for Business Entities: Fall 2015ASSIGNMENT 2Save & Exit SubmitQuestion 1 (of 1)1.value:50.00 pointsThe individual financial statements for Gibson Company and Keller Company for the yearending December 31, 2015, follow. Gibson acquired a 60 percent interest in Keller on January 1,2014, in exchange for various considerations totaling $900,000. At the acquisition date, the fairvalue of the noncontrolling interest was $600,000 and Keller’s book value was $1,200,000.Keller had developed internally a customer list that was not recorded on its books but had anacquisition-date fair value of $300,000. This intangible asset is being amortized over 20 years.Gibson sold Keller land with a book value of $55,000 on January 2, 2014, for $130,000.Keller still holds this land at the end of the current year.Keller regularly transfers inventory to Gibson. In 2014, it shipped inventory costing$227,500 to Gibson at a price of $350,000. During 2015, intra-entity shipments totaled$400,000, although the original cost to Keller was only $240,000. In each of these years, 20percent of the merchandise was not resold to outside parties until the period following thetransfer. Gibson owes Keller $60,000 at the end of 2015.