Required:

For each of the 6 investments held by Thompson at December 31, 2019, please provide the ending balance that each investment would have in Thompson's unconsolidated balance sheet along with Thompson's equity earnings (a through g).

Then provide Thompson's consolidated balance sheet and income statement.Provide your worksheets and supporting calculations (in good form) and any assumptions you have made.You may need to make some assumptions.Please provide a list of these assumptions.If there is missing information, for example, you might choose to use an assumed number.

Note 7: Intercompany investments

Thompson Company has a variety of investments in other companies.Thompson has a policy of using the complete equity method to account for intercompany investments meeting the criteria for its application.The following provides more information on these investments.

Lake Corporation

Thompson Company purchased all of the outstanding shares of Lake Corporation on January 1^st, 2019 for $230,000. At that time, Lake had common stock with a book value of $100,000.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, 2019, Lake owed Thompson $2,500 for services provided during 2019.

Lake Corporation is an American company and its functional currency is US dollars.

Thompson sold land to Lake during 2019 for $50,000.This land was still held by Lake at December 31^st, 2019.

River Corporation

Thompson Company purchased all of the outstanding shares of River Corporation on January 1^st, 2018 for 400,000.At that time River had common stock with a book value of 135,000 and retained earnings of (20,000). All of River's asset and liability book values approximated fair values at acquisition except for buildings and equipment that were overvalued by $30,000.

River Company is a British company and its functional currency is British pounds.

Mountain Corporation

Thompson Company purchased all of the outstanding shares of Mountain Corporation on January 1^st, 2017 for $218,000.At that time Mountain had common stock with a book value of $108,000.Retained earnings of Mountain at the date of acquisition were $10,000.At acquisition all of Mountain's asset and liability book values approximate fair values.

Mountain Corporation is an American company and its functional currency is US dollars.

In 2018, goodwill on this investment was impaired by 10%.

Mountain had income of $20,000 in 2017 and paid no dividends in 2017.

Beach Company

Thompson Company purchased 75% of the outstanding shares of Beach Corporation on January 1^st, 2018 for $100,000.At that time Beach had common stock with a book value of $132,000.Retained earnings of Beach at the date of acquisition were $10,000.The fair value of 25% of Beach at the date of acquisition was approximated to be $25,000.At acquisition all of Beach's asset and liability book values approximate fair values.

Beach Corporation is an American company and its functional currency is US dollars.

City Corporation

Thompson Company purchased 55% of the outstanding shares of City Corporation on January 1^st, 2018 for $500,000.At that time City had common stock with a book value of $90,000.Retained earnings of City at the date of acquisition were $10,000.The fair value of the 45% of City that was not acquired by Thompson was approximated to be have a fair value $280,000 at the date of acquisition.At acquisition, all of City's asset and liability book values approximate fair values except for its buildings and equipment that were undervalued by $20,000.

City Corporation is an American company and its functional currency is US dollars.

Half of City' service revenues are related to services provided to Thompson during 2019.

Goodwill on the purchase was impaired during 2019 by $20,000.

Island Corporation

Thompson Company purchased 45% of the outstanding shares of Island Corporation on January 1^st, 2018 for $50,000.At that time Island had common stock with a book value of $75,600.Retained earnings of Island at the date of this purchase were $20,000.The fair value of the 55% of Island that was not purchased by Thompson was approximated to be have a fair value $280,000 at the date of the purchase.All of Island's asset and liability book values approximated fair values except for its buildings and equipment that were undervalued by $20,000.

Island Corporation is an American company and its functional currency is US dollars.

1/3 of Island's service revenues are related to services provided to Thompson during 2019.

Thompson Company Lake Corporation River Corporation Mountain Corporation Beach Company City Corporation Island Company

Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit

Cash 74000 42000 56700 45360 46200 37800 31752

Accounts receivable 130000 53000 71550 57240 58300 47700 40068

Land 60000 50000 67500 54000 55000 45000 37800

Buildings & equipment 500000 350000 472500 378000 385000 315000 264600

Investment in Lake A

Investment in River b

Investment in Mountain c

Investment in Beach d

Investment in City e

Investment in Island f

Cost of services provided 470000 130000 175500 140400 143000 117000 98280

Depreciation expense 35000 18000 24300 19440 19800 16200 13608

Other expenses 57000 60000 81000 64800 66000 54000 45360

Dividends declared 30000 12000 16200 12960 13200 10800 9072

Accumulated depreciation 265000 93000 125550 100440 102300 83700 70308

Accounts payable 71000 17000 22950 18360 18700 15300 12852

Wages payable 58000 60000 81000 64800 66000 54000 45360

Notes payable 100000 85000 114750 91800 93500 76500 64260

Common stock 200000 100000 135000 108000 110000 90000 75600

Retained earnings, Jan 1. 2019 292000 120000 162000 129600 132000 108000 90720

Service revenue 610000 240000 324000 259200 264000 216000 181440

Gain on sale of land to Lake 40000

Equity earnings g

Note: All balances provided are as of December 31, 2019 (except for retained earnings)