Consolidated Balance Sheet
Thompson Company spent $240,000 to acquire all of Lake Corporation’s stock on January 1, 20X2. The balance sheets of the two companies on December 31, 20X3, showed the following amounts:
| Thompson Company | Lake Corporation |
Cash | $ 30,000 | $ 20,000 |
Accounts Receivable | 100,000 | 40,000 |
Land | 60,000 | 50,000 |
Buildings and Equipment | 500,000 | 350,000 |
Less: Accumulated Depreciation | (230,000) | (75,000) |
Investment in Lake Corporation | 252,000 |
|
| $712,000 | $385,000 |
Accounts Payable | $ 80,000 | $ 10,000 |
Taxes Payable | 40,000 | 70,000 |
Notes Payable | 100,000 | 85,000 |
Common Stock | 200,000 | 100,000 |
Retained Earnings | 292,000 | 120,000 |
| $712,000 | $385,000 |
Lake reported retained earnings of $100,000 at the date of acquisition. The difference between the acquisition price and underlying book value is assigned to buildings and equipment with a remaining economic life of 10 years from the date of acquisition.
Required
a.Give the appropriate eliminating entry or entries needed to prepare a consolidated balance sheet as of December 31, 20X3.
b.Prepare a consolidated balance sheet worksheet as of December 31, 20X3.
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