Swag co Inc., a British company, is a wholly owned subsidiary of Give Away Inc., a Canadian
Question:
Swag co Inc., a British company, is a wholly owned subsidiary of Give Away Inc., a Canadian company that reports under IFRS, with the Canadian dollar as its functional currency. The following are the statement of comprehensive income and comparative statements of financial position for Swag co for Year 6, expressed in British pounds():
SwagcoInc.
Statementofcomprehensiveincome
FortheyearendedDecember31,Year6
Salesrevenue | 4,500,000 |
Costofgoodssold: | |
Beginninginventory | 410,000 |
Purchases | 1,500,000 |
Endinginventory | (400,000) |
Costofgoodssold | 1,510,000 |
Otheroperatingexpenses | 860,000 |
Depreciation | 300,000 |
Financecost | 200,000 |
2,870,000 | |
Netincomeandcomprehensiveincome | 1,630,000 |
SwagcoInc.
Comparativestatementsoffinancialposition
AsatDecember31,Year6
Year6 | Year5 | |
Cash | 590,000 | 250,000 |
Accountsreceivable | 750,000 | 550,000 |
Inventory | 400,000 | 410,000 |
Land | 600,000 | 500,000 |
Depreciableassets(net) | 1,700,000 | 2,000,000 |
4,040,000 | 3,710,000 | |
Accountspayable | 310,000 | 410,000 |
Bondspayable | 2,200,000 | 2,200,000 |
Commonshares | 600,000 | 600,000 |
Retainedearnings | 930,000 | 500,000 |
4,040,000 | 3,710,000 |
Additionalinformation:
- SwagcowasformedonJanuary2,Year1.
- GiveAwaypurchasedSwagcoonDecember31,Year4.
- Thefinancecostrepresentsinterestonthebondspaidevenlythroughouttheyear.
- ThebeginninginventoryforYear6waspurchasedatanaveragerateof$1.71.
- TheendinginventoryforYear6waspurchasedatanaveragerateof$1.57.
- The original depreciable assets and land were purchased on the formation ofSwagco.
- AdditionallandwaspurchasedonNovember1,Year6.
- Thebonds,whichhavea10-yearmaturity,wereissuedattheformationofSwagco.
- DividendsaredeclaredandpaidonDecember31ofeachyear.
- Thefollowingareexchangerates(1=C$):
January2,Year1 | C$1.48 |
December31,Year4 | 1.65 |
Average forYear5 | 1.68 |
December31,Year5 | 1.70 |
Average forYear6 | 1.62 |
July1, Year6 | 1.64 |
November1,Year6 | 1.60 |
December31,Year6 | 1.55 |
Required:
a translated statement of comprehensive income and statement of financial position for Swagco for the yearending December31, Year6.
Assume Swag co is an integrated operation(functional currency is the Canadian dollar).
Additional information relating to opening balances:
- Translated opening retained earnings were C$759,100.
Intermediate Accounting
ISBN: 978-0071339476
Volume 1, 6th Edition
Authors: Beechy Thomas, Conrod Joan, Farrell Elizabeth, McLeod Dick I