2. On January 1, 2021 a parent company based in US acquired a subsidiary in Egypt and...
Question:
2. On January 1, 2021 a parent company based in US acquired a subsidiary in Egypt and the following information is extracted from the subsidiary’ books for 2021 :( 3.0 marks)
Inventory purchased on Oct. 1 2021.
Purchases of inventory have been made throughout the year.
Uses straight-line depreciation on fixed assets.
Dividends declared and paid on December 1, 2021
Fixed assets have been purchased on Feb. 1 2021.
Adjusted trail balance as of 31/12/2021 as follows:
Account title | Amount in Egyptian pound |
Cash | 2,000,000 |
Accounts receivable | 2,000,000 |
Inventory | 5,000,000 |
Notes receivable | 1,000,000 |
Plant assets | 10,000,000 |
dividends | 200,000 |
Cost of goods sold | 7,000,000 |
Depreciation expense | 200,000 |
Other expenses | 500,000 |
Total debits | 25,900,000 |
Sales | 10,000,000 |
Accumulated depreciation | 200,000 |
Accounts payable | 3,000,000 |
Notes payable | 1,000,000 |
Common stocks | 9,600,000 |
Retained earnings | 2,100,000 |
Total credits | 25,900,000 |
Exchange rates:
Date | Exchange rates |
January 1, 2021 | 15.50 |
Oct. 1 2021 | 15,60 |
December 1, 2021 | 16,50 |
Feb. 1 2021 | 17.00 |
December 31, 2021 | 17,20 |
Average | 16.36 |
Required:
Prepare a schedule to translate Subsidiary’s financial statements on 31/12/2021 to U.S. dollars using current rate method.
Intermediate Accounting Reporting and Analysis
ISBN: 978-1285453828
2nd edition
Authors: James M. Wahlen, Jefferson P. Jones, Donald Pagach