2. (25 pts) Below is the balance sheet of US Amalgamated and its subsidiary, British Foods,...

 

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2. (25 pts) Below is the balance sheet of US Amalgamated and its subsidiary, British Foods, LTD. The subsidiary is ownd 100% by US Amalgamated, and their financials are in British pounds sterling. British Foods was purchased January 1, 2018. Because of light control of the subsidiary, the current rate method is used for translation. You are to translate the subidiary below, then record on US Amalgamated's books the profit and dividends. You are to show the elimination entries and consolidated statements. Lastly, you must prove the cumulative translation adjustment. Record the profit and dividends on the books of Amalgamated here: Dr. Cr. Prove the cumulative translation adjustment here: Prove the cumulative translation adjustment here: Dec 31, 2018 Dec 31, 2018 Translated Elimination Entries US Amalga. 400,000 £ 100,000 British Foods British Foods Dr. Cr. Consolidated Sales 250,000 80,000 Expenses using funds Depreciation Income from Subsidiary 100,000 20,000 Net Income 150,000 300,000 50,000 RE Jan 1, 2018 700,000 £ Dividends 5,000 £ RE Dec 31, 2018 400,000 100,000 150,000 400,000 Cash 100,000 £ Receivables 200,000 Property (net) 500,000 Investment in BF Total Assets 650,000 Payables 76,000 £ 50,000 200,000 Common Stock 500,000 Translation Adjustment Retained Earnings, Dec 31 Total Liab and Equity 400,000 650,000 £ 500,000 British foods was purchased on Jan 1, 2018 at book value when net assets were The cost was $750,000, as the exchange rate was $1.50 per 1.0 British pound sterling. On that date, British Foods had net monetary assets of £ 80,000 The exchange rate on December 31, 2018 is $1.60 per 1.0 British pound sterling, and the average rate for the year was $1.55 per 1.0 Bristish pound sterling. The dividend was paid at $1.58 per 1.0 British pound sterling. 2. (25 pts) Below is the balance sheet of US Amalgamated and its subsidiary, British Foods, LTD. The subsidiary is ownd 100% by US Amalgamated, and their financials are in British pounds sterling. British Foods was purchased January 1, 2018. Because of light control of the subsidiary, the current rate method is used for translation. You are to translate the subidiary below, then record on US Amalgamated's books the profit and dividends. You are to show the elimination entries and consolidated statements. Lastly, you must prove the cumulative translation adjustment. Record the profit and dividends on the books of Amalgamated here: Dr. Cr. Prove the cumulative translation adjustment here: Prove the cumulative translation adjustment here: Dec 31, 2018 Dec 31, 2018 Translated Elimination Entries US Amalga. 400,000 £ 100,000 British Foods British Foods Dr. Cr. Consolidated Sales 250,000 80,000 Expenses using funds Depreciation Income from Subsidiary 100,000 20,000 Net Income 150,000 300,000 50,000 RE Jan 1, 2018 700,000 £ Dividends 5,000 £ RE Dec 31, 2018 400,000 100,000 150,000 400,000 Cash 100,000 £ Receivables 200,000 Property (net) 500,000 Investment in BF Total Assets 650,000 Payables 76,000 £ 50,000 200,000 Common Stock 500,000 Translation Adjustment Retained Earnings, Dec 31 Total Liab and Equity 400,000 650,000 £ 500,000 British foods was purchased on Jan 1, 2018 at book value when net assets were The cost was $750,000, as the exchange rate was $1.50 per 1.0 British pound sterling. On that date, British Foods had net monetary assets of £ 80,000 The exchange rate on December 31, 2018 is $1.60 per 1.0 British pound sterling, and the average rate for the year was $1.55 per 1.0 Bristish pound sterling. The dividend was paid at $1.58 per 1.0 British pound sterling.

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