Lea Company acquired all of Tenzing Corporation's stock on January 1, 20X6 for $150,000 cash. On December 31, 20X7, the balance sheets of the two companies showed the following amounts: 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.
Required:
1) Give the appropriate eliminating entry or entries needed to prepare a consolidated balance sheet as of December 31, 20X7.
2) Prepare a consolidated balance sheet worksheet as of December 31, 20X7.

Question

Lea Company acquired all of Tenzing Corporation's stock on January 1, 20X6 for $150,000 cash. On December 31, 20X7, the balance sheets of the two companies showed the following amounts:  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.
Required:
1) Give the appropriate eliminating entry or entries needed to prepare a consolidated balance sheet as of December 31, 20X7.
2) Prepare a consolidated balance sheet worksheet as of December 31, 20X7.

Quizplus · Accepted Answer

The Answer of Lea Company acquired all of Tenzing Corporation's stock on January 1, 20X6 for $150,000 cash. On December 31, 20X7, the balance sheets of the two companies showed the following amounts:  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.
Required:
1) Give the appropriate eliminating entry or entries needed to prepare a consolidated balance sheet as of December 31, 20X7.
2) Prepare a consolidated balance sheet worksheet as of December 31, 20X7.

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