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Following are the individual financial statements for Gibson and Davis for the year ending December 31, 2021:

Screen Shot 2021-10-07 at 9.31.17 PM.pngScreen Shot 2021-10-07 at 9.31.30 PM.png

Gibson acquired 60 percent of Davis on April 1, 2021, for $603,900. On that date, equipment owned by Davis (with a five-year remaining life) was overvalued by $84,000. Also on that date, the fair value of the 40 percent noncontrolling interest was $402,600. Davis earned income evenly during the year but declared the $40,000 dividend on November 1, 2021.


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