Lea Company acquired all of Tenzing Corporation's stock on January 1,2006 for $150,000 cash.On December 31,2008,the trial balances of the two companies were as follows:
Tenzing Corporation reported retained earnings of $75,000 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 five years from the date of acquisition.At December 31,2008,Tenzing owed Lea $4,000 for services provided.

-Based on the preceding information,all of the following are eliminating entries required on December 31,2008,to prepare consolidated financial statements,except:
A)Option A
B)Option B
C)Option C
D)Option D

Question

Lea Company acquired all of Tenzing Corporation's stock on January 1,2006 for $150,000 cash.On December 31,2008,the trial balances of the two companies were as follows:
Tenzing Corporation reported retained earnings of $75,000 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 five years from the date of acquisition.At December 31,2008,Tenzing owed Lea $4,000 for services provided.
 
-Based on the preceding information,all of the following are eliminating entries required on December 31,2008,to prepare consolidated financial statements,except:
A)Option A 
B)Option B 
C)Option C 
D)Option D

Quizplus · Accepted Answer

The eliminating entry to eliminate the investment account is not required because the investment is in a subsidiary, and the subsidiary's net assets are consolidated.

Lea Company Acquired All of Tenzing Corporation's Stock on January