Give the appropriate elimination entry or entries

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Reference no: EM131088367

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	Lake
	Company	Corporation
Cash	$ 30,000	$ 20,000
Accounts Receivable	100,000	40,000
Land	60,000	50,000
Buildings & 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. Assume Lake's accumulated depreciation on the acquisition date was $25,000.

Required

a. Give the appropriate elimination 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.

Reference no: EM131088367

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