On January 1, 2004, Woods Ltd. formed a foreign subsidiary that issued all of its currently outstanding common shares on that date. Selected captions from the balance sheets, all of which are shown in local currency units (LCU), are as follows:

On January 1, 2004, Woods’ foreign subsidiary purchased land for 24,000 LCU and capital assets for 140,000 LCU. On July 1, 2005, additional equipment was purchased for 30,000 LCU. Capital assets are being depreciated on a straight line basis over a 10-year period with no salvage value. A full year’s depreciation is taken in the year of purchase.

On January 15, 2004, 7% bonds with a face value of 120,000 LCU were sold.
The bonds pay interest on July 15 and January 15 each year. The first payment was made on July 15, 2004.

Required:

Prepare a schedule translating the selected captions above into Canadian dollars at December 31, 2004, and December 31, 2005, using the temporal method. Show supporting computations in good form.

Transcribed Image Text:

Accounts receivable, net of allowance for uncollectable accounts of 2,200 LCU at December 31, 2005, and 2,000 LCU at December 31, 2004 Inventories, at cost Capital assets, net of accumulated depreciation of 31,000 LCU at December 31, 2005, and 14,000 LCU at December 31, 2004 Long-term debt Common stock, authorized shares par value 10 LCU per share, issued and outstanding 5,000 shares at December 31, 2005, and December 31, 2004 Additional Information: Exchange Rates January 1, 2004 to July 31, 2004 August 1, 2004 to October 31, 2004 November 1, 2004 to June 30, 2005 July 1, 2005 to December 31, 2005 Average rate for 2004 Average rate for 2005 2005 40,000 80.000 163,000 100,000 50,000 2.1 LCU to $1 1.9 LCU to $1 1.8 LCU to $1 1.6 LCU to $1 2.0 LCU to $1 1.7 LCU to $1 2004 35,000 75,000 150,000 120,000 50,000