San is a 90 percent-owned foreign subsidiary of Par, acquired by Par on January 1, 2016, at

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San is a 90 percent-owned foreign subsidiary of Par, acquired by Par on January 1, 2016, at book value equal to fair value, when the exchange rate for LCUs of San's home country was $0.24. San's functional currency is the LCU. Par made a 200,000 LCU loan to San on May 1, 2016, when the exchange rate for LCUs was $0.23. The loan is short-term and is denominated at $46,000. Adjusted trial balances of the affiliated companies at year-end 2016 are as follows:

San is a 90 percent-owned foreign subsidiary of Par, acquired

San paid dividends in September, when the exchange rate was $0.21. The exchange rate for LCUs was $0.20 at December 31, 2016, and the average exchange rate for 2016 was $0.22.
REQUIRED
1. Prepare a worksheet to translate San's adjusted trial balance into U.S. dollars at December 31, 2016.
2. Prepare the necessary journal entries for Par to account for its investment in San for 2016 under the equity method.
3. Prepare consolidation working papers for Par Corporation and Subsidiary for the year ended December 31, 2016.

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
Exchange Rate
The value of one currency for the purpose of conversion to another. Exchange Rate means on any day, for purposes of determining the Dollar Equivalent of any currency other than Dollars, the rate at which such currency may be exchanged into Dollars...
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Advanced Accounting

ISBN: 978-0134472140

13th edition

Authors: Floyd A. Beams, Joseph H. Anthony, Bruce Bettinghaus, Kenneth Smith

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