P4-29 Comprehensive Problem: Consolidation in Subsequent Period Thompson Company spent $240,000 to acquire all of Lake Corporation's stock on January 1, 20X2. On December 31, 20X4, the trial balances of the two companies were as follows: zus Thompson Company Debit Credit Item $ Lake Corporation Debit Credit $ 42,000 53,000 50,000 350,000 74,000 130,000 60,000 500,000 268,000 470,000 35,000 57,000 30,000 130,000 18,000 60,000 12,000 Cash Accounts Receivable Land Buildings & Equipment Investment in Lake Corporation Stock Cost of Services Provided Depreciation Expense Other Expenses Dividends Declared Accumulated Depreciation Accounts Payable Taxes Payable Notes Payable Common Stock Retained Earnings Service Revenue Income from Subsidiary $ 265,000 71,000 58,000 100,000 200,000 292,000 610,000 28,000 $1,624,000 $ 93,000 17,000 60,000 85,000 100,000 120,000 240,000 $1,624,000 $715,000 $715,000 Lake Corporation 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. At December 31, 20X4, Lake owed Thompson $2,500 for services provided. Required a. Give all journal entries recorded by Thompson with regard to its investment in Lake during 20X4. b. Give all elimination entries required on December 31, 20X4, to prepare consolidated financial c. Prepare a three-part consolidation worksheet as of December 31, 20X4. statements. han Cair Value of Net A