Smart Inc. is a wholly owned subsidiary of Wealth Corporation. Smart operates in Canada and is deemed to have a functional currency of the Canadian dollar. Wealth is a Chinese company that has a functional currency of the yuan (¥). During the year, Smart sold $50,000 of merchandise to Wealth for a profit of $10,000 on the sale. Wealth has 20% of the merchandise still in inventory. Each company pays tax at the rate of 30%. For the consolidated financial statements, the functional currency of Wealth will be used as the presentation currency. The following exchange rates exist:
Date .......... C$1
Transaction date .... ¥6.377
Average ......... ¥6.151
Year end closing ...... ¥6.542
Prepare the consolidation adjustments that will be required.

  • CreatedJune 09, 2015
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