On January 2, 2014, P Company, a U.S.-based company, acquired for 2,000,000 francs an 80% interest...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
On January 2, 2014, P Company, a U.S.-based company, acquired for 2,000,000 francs an 80% interest in SFr Company, a Swiss company. On January 2, 2014, SFr Company reported a retained earnings balance of 480,000 francs. SFr s books are maintained in francs and are in conformity with U.S. generally accepted accounting principles. Trial balances of the two companies as of December 31, 2015, are presented here: Debits Cash Accounts Receivable Inventory (FIFO cost) Investment in SFr Company Land Buildings (net) Equipment (net) Dividends Declared Cost of Goods Sold Depreciation Expense Other Expense Income Tax Expense Totals Credits Accounts Payable Short-term Notes Payable Bonds Payable Common Stock P Company SFr Company (Dollars) (Francs) 499,000 512,000 624,000 300,000 448,000 611,000 289,000 199,000 2,726,000 210,000 913,000 99,000 7,430,000 970,000 658,000 1,032,000 536,000 302,000 700,000 800,000 503,000 553,000 404,000 375,000 2,331,000 123,000 824,000 102,000 7,875,000 P Company SFr Company (Dollars) (Francs) 804,000 654,000 850,000 960,000 Additional Paid-in Capital Retained Earnings, 1/1 Sales Dividend Income Totals 300,000 550,000 4,188,000 54,000 7,430,000 Date of subsidiary acquisition Average for 2014 January 1, 2015 Other information related to the subsidiary follows: 1. Beginning inventory of 836,000 francs was acquired when the exchange rate was $0.165. 2. Purchases made uniformly throughout 2015 were 2,527,000 francs. 3. The franc is identified as the subsidiary s functional currency. 4. The subsidiary s beginning (1/1/15) retained earnings and cumulative translation adjustment (credit) in dollars were $82,835 and $29,236, respectively. All plant assets were quired before the parent obtained a controlling interest in the subsidiary. 5. 6. Sales are made and all expenses are incurred uniformly throughout the year. 7. The ending inventory was acquired during the last quarter. 8. The subsidiary declared and paid dividends of 375,000 francs on September 2. The following direct exchange rate quotations were available: 9. September 2, 2015 December 31, 2015 Average for the 4th quarter, 2015 Average for 2015 300,000 511,000 3,796,000 $0.15 0.156 0.17 0.18 0.19 0.185 0.176 7,875,000 (a) Prepare a workpaper to translate the trial balance of the subsidiary into dollars using the current rate method. (Round answers to 0 decimal places, e.g. 5,125. Enter loss and debit cumulative translation adjustment using either a negative sign preceding the number e.g. -2,945 or parentheses e.g. (2,945).) Consolidated Statement of Income and Retained Earnings Balance Sheet Francs Translation Rate ¡X U.S. On January 2, 2014, P Company, a U.S.-based company, acquired for 2,000,000 francs an 80% interest in SFr Company, a Swiss company. On January 2, 2014, SFr Company reported a retained earnings balance of 480,000 francs. SFr s books are maintained in francs and are in conformity with U.S. generally accepted accounting principles. Trial balances of the two companies as of December 31, 2015, are presented here: Debits Cash Accounts Receivable Inventory (FIFO cost) Investment in SFr Company Land Buildings (net) Equipment (net) Dividends Declared Cost of Goods Sold Depreciation Expense Other Expense Income Tax Expense Totals Credits Accounts Payable Short-term Notes Payable Bonds Payable Common Stock P Company SFr Company (Dollars) (Francs) 499,000 512,000 624,000 300,000 448,000 611,000 289,000 199,000 2,726,000 210,000 913,000 99,000 7,430,000 970,000 658,000 1,032,000 536,000 302,000 700,000 800,000 503,000 553,000 404,000 375,000 2,331,000 123,000 824,000 102,000 7,875,000 P Company SFr Company (Dollars) (Francs) 804,000 654,000 850,000 960,000 Additional Paid-in Capital Retained Earnings, 1/1 Sales Dividend Income Totals 300,000 550,000 4,188,000 54,000 7,430,000 Date of subsidiary acquisition Average for 2014 January 1, 2015 Other information related to the subsidiary follows: 1. Beginning inventory of 836,000 francs was acquired when the exchange rate was $0.165. 2. Purchases made uniformly throughout 2015 were 2,527,000 francs. 3. The franc is identified as the subsidiary s functional currency. 4. The subsidiary s beginning (1/1/15) retained earnings and cumulative translation adjustment (credit) in dollars were $82,835 and $29,236, respectively. All plant assets were quired before the parent obtained a controlling interest in the subsidiary. 5. 6. Sales are made and all expenses are incurred uniformly throughout the year. 7. The ending inventory was acquired during the last quarter. 8. The subsidiary declared and paid dividends of 375,000 francs on September 2. The following direct exchange rate quotations were available: 9. September 2, 2015 December 31, 2015 Average for the 4th quarter, 2015 Average for 2015 300,000 511,000 3,796,000 $0.15 0.156 0.17 0.18 0.19 0.185 0.176 7,875,000 (a) Prepare a workpaper to translate the trial balance of the subsidiary into dollars using the current rate method. (Round answers to 0 decimal places, e.g. 5,125. Enter loss and debit cumulative translation adjustment using either a negative sign preceding the number e.g. -2,945 or parentheses e.g. (2,945).) Consolidated Statement of Income and Retained Earnings Balance Sheet Francs Translation Rate ¡X U.S.
Expert Answer:
Answer rating: 100% (QA)
Part A Translation Balance Sheet Francs Rate US Cash 962500 019 182875 Accounts Receivable 660000 01... View the full answer
Related Book For
Posted Date:
Students also viewed these finance questions
-
Question 15 1 pts Find the value of a put option on 10,000 with a strike price of 1.6000/ which matures in one period. The current exchange rate is 1.5000/ and in the next period the exchange rate...
-
You receive a call from a friend, who knows that you are taking the General Physics 2 course, to place an order. Their friend tells him that he has read in an automotive magazine that, in a car, the...
-
A vessel is floating at 7.5 m mean draft in dock water of RD 1.010. TPC 25 tonnes and FWA 180 mm. The maximum permissible draft in SW is 8.5 m. Find the cargo that can still be loaded.
-
Repeat the instructions of Exercise 1 for Graph the function Then discuss, in detail, limits, one-sided limits, continuity, and one-sided continuity of at x = -1, 0, and 1. Are any of the...
-
What is front running? Explain why an investor should be concerned if his stockbroker front runs his trades.
-
Use the map in Figure 1.6 to determine the number of different paths from point A to the point indicated in Problems 1518. H Figure 1.6 INGIN WHILS GOODKEE CONTIN 0900000000 100002090010...
-
What are the ways that social media sites are affecting courtrooms?
-
Rockport Municipal Marina is considering adding a new dock to accommodate large yachts. The dock would cost $700,000 and would generate $144,000 annually in new cash inflows. Its expected life would...
-
1: If you are doing an audit of a B2C (business to consumer, i.e GAP clothes) company what social networks are most important? What would you be looking for in their posts or on the networks to know...
-
What insights from the discussion of the Morgan Stanley 2003 report on eBay apply to the 2013 report on Aetna by Jefferies? What insights from the discussion of the Morgan Stanley 2003 report on eBay...
-
Researchers from a highly respected university reported in a journal article that genetically modified (GM) corn sold by GeneiOrg may pose a threat to human health. The researchers isolated genes...
-
Suppose parametric equations for the line segment between (8, 9) and (-2,-5) have the form: (x(t) = a+bt y(t) = c + dt If the parametric curve starts at (8, 9) when t =0 and ends at (2,5) at t = 1,...
-
MyCarCorp produces car parts and is considering opening a new factory in Russia (assume now is beginning of 2002 and the factory would open in 2003). Factory will re- quire an initial investment of...
-
which is effective for engaging national debates and dialogues, traditional media or new media?
-
What is the difference between actual results and budgeted? Explain in details.
-
Suppose the company you work for provides a week's paid vacation package as reward to the employee of the year and his or her immediately family. Your manager has asked you to select this year's...
-
How do individuals navigate the balance between short-term goals and long-term objectives in their time management approach to achieve sustainable success ?
-
Pearson Education, a publisher of college textbooks, would like to know if students prefer traditional textbooks or digital textbooks. A random sample of students was asked their preference and the...
-
To what extent can personal creditors seek recovery from partnership assets?
-
Presentation A company considered displaying negative amounts using red print in a manner that clearly distinguishes the negative attribute. When determining methods of display, does the company need...
-
Select the best answer for each of the following items: 1. When used in fund accounting, the term fund usually refers to (a) A sum of money designated for a special purpose. (b) A liability to other...
-
State which of the following items could appear as an asset on the statement of financial position of Goblin Combe plc, a leading premium drinks business: \($150,000\) of product sold during the...
-
Trading continues apace for your new business Climb On! The products have proved to be popular and, seeing this as your opportunity to seize the day, you decided to expand and grow the business. Here...
-
A rare book library at a University of England in England houses first edition (FE), original manuscript (OM), and authors journals (AJ). Some of these rare books are worth hundreds of thousands of...
Study smarter with the SolutionInn App