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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