Below you will find the trial balance for Parent Company and its wholly owned purchase, Subsidiary Company, as of December 31, 2012. The financial statements are denominated in British pounds.

Other Important Information:
1. Subsidiary Company's assets and liabilities are all shown at fair value except for:
a. The fair value of Inventory is 32,000.
b. The fair value of Depreciable Assets is 370,000.
2. Subsidiary company sold Parent Company an item that is in Parent Company's inventory for 10,000 and cost Subsidiary Company 5,000. The sale was made to Parent Company on credit, and no payment has been made.
3. On December 27, 2012, Parent Company made a long-term loan to Subsidiary Company in the amount of 100,000.
4. Subsidiary Company paid Parent Company 7,000 for Consulting Services. Subsidiary Company considers this an Administrative Expense, and Parent Company considers it Sales Revenue.
5. Exchange rates are:
March 31, 2012, Exchange Rate:......................1 £ = $1.24Average Rate for 2012: :...............................1 £ = $1.22December 31, 2012, Exchange Rate:..................1 £ = $1.20
Requirements:
Prepared balance sheet.

Transcribed Image Text:

Subsidiary Company Parent Company Company Debit Credit Accounts Debit Credit Cash £10,000 £4,000 Accounts Receivable 25,000 10,000 Inventory 30,000 12,000 Short-Term 40,000 6,000 Investments Prepaid Assets 35,000 12,000 Investment in 290,000 Subsidiary Long-Term Notes 150,000 14,000 Receivable Debt Service Fund 50,000 Depreciable Assets 900,000 350,000 Accumulated £200,000 £50,000 Depreciation Intangible Assets 45,000 20,000 Current Liabilities 92,000 44,000 Long-Term Notes Payable 225,000 119,000