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.