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Lea Company acquired all of Tenzing Corporation's stock on January 1, 20X6 for $150,000 cash. On December 31, 20X8, the trial balances of the two companies were as follows:

	Lea company		Tenzing Corp.
	Debit	Credit	Debit	Credit
Cash	$90,000		$58,000
Accounts Receivable	97,000		55,000
Land	80,000		45,000
Buildings and Equipment	300,000		200,000
Investment in Tenzing Corporation	180,000
Cost of Services Provided	140,000		75,000
Depreciation Expense	30,000		20,000
Other Expenses	70,000		35,000
Dividends Declared	40,000		20,000
Accumulated Depreciation		$180,000		$100,000
Accounts Payable		42,000		18,000
Taxes Payable		20,000		20,000
Notes Payable		75,000		50,000
Common Stock		100,000		50,000
Retained Earnings		265,000		90,000
Service Revenue		300,000		180,000
Income from Subsidiary		45,000
	$1,027,000	$1,027,000	$508,000	$508,000

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, 20X8, Tenzing owed Lea $4,000 for services provided.

4. Based on the preceding information, all of the following are consolidating entries required on December 31, 20X8, to prepare consolidated financial statements, except:

A)	Common Stock	50,000
	Retained Earnings	90,000
	Income from Tenzing Corp.	50,000
	Dividends declared		20,000
	Investment in Tenzing Corp.		170,000
B)	Accounts Payable	4,000
	Accounts Receivable		4,000
C)	Depreciation Expense	5,000
	Income from Tenzing Corp.		5,000
D)	Buildings and Equipment	20,000
	Accumulated Depreciation		10,000
	Investment in Tenzing Corp.		10,000

Option A

Option B

Option C

Option D

5. Based on the preceding information, what amount will be reported as total assets in the consolidated balance sheet for 20X8?

a. $666,000

b. $747,000

c. $651,000

d. $946,000

6. Based on the preceding information, what amount will be reported for total accounts payable in the consolidated balance sheet for the year 20X8?

a. $56,000

b. $46,000

c. $60,000

d. $42,000

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