On January 1, 2024, Trenten Systems, a U.S.-based company, purchased a controlling interest in Grant Management...

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On January 1, 2024, Trenten Systems, a U.S.-based company, purchased a controlling interest in Grant Management Consultants located in Zurich, Switzerland. The acquisition was treated as a purchase transaction. The 2024 financial statements stated in Swiss francs are given below. GRANT MANAGEMENT CONSULTANTS Comparative Balance Sheets January 1 and December 31, 2024 Cash and Receivables Jan. 1 Dec. 31 20,000 55,000 Net Property, Plant, and Equipment 40,000 37,000 Direct exchange rates for Swiss franc are: Required: A. Translate the year-end balance sheet and income statement of the foreign subsidiary using the current rate method of translation. B. Prepare a schedule to verify the translation adjustment. Totals 60,000 92,000 Accounts and Notes Payable 30,000 32,000 Common Stock 20,000 20,000 Retained Earnings 10,000 40,000 Totals 60,000 92,000 GRANT MANAGEMENT CONSULTANTS Consolidated Income and Retained Earnings Statement for the Year Ended December 31, 2024 Revenues 75,000 Operating Expenses including Depreciation of 3,000 francs 30,000 Net Income Dividends Declared and Paid Increase in Retained Earnings January 1, 2024 December 31, 2024 Average for 2024 Dividend declaration and payment date 45,000 15,000 30,000 Dollars per Swiss Franc $1.09 1.03 1.06 1.08 On January 1, 2024, Trenten Systems, a U.S.-based company, purchased a controlling interest in Grant Management Consultants located in Zurich, Switzerland. The acquisition was treated as a purchase transaction. The 2024 financial statements stated in Swiss francs are given below. GRANT MANAGEMENT CONSULTANTS Comparative Balance Sheets January 1 and December 31, 2024 Cash and Receivables Jan. 1 Dec. 31 20,000 55,000 Net Property, Plant, and Equipment 40,000 37,000 Direct exchange rates for Swiss franc are: Required: A. Translate the year-end balance sheet and income statement of the foreign subsidiary using the current rate method of translation. B. Prepare a schedule to verify the translation adjustment. Totals 60,000 92,000 Accounts and Notes Payable 30,000 32,000 Common Stock 20,000 20,000 Retained Earnings 10,000 40,000 Totals 60,000 92,000 GRANT MANAGEMENT CONSULTANTS Consolidated Income and Retained Earnings Statement for the Year Ended December 31, 2024 Revenues 75,000 Operating Expenses including Depreciation of 3,000 francs 30,000 Net Income Dividends Declared and Paid Increase in Retained Earnings January 1, 2024 December 31, 2024 Average for 2024 Dividend declaration and payment date 45,000 15,000 30,000 Dollars per Swiss Franc $1.09 1.03 1.06 1.08

Answer rating: 100% (QA)

A To translate the yearend balance sheet and income statement of the foreign subsidiary using the cu... View the full answer