36 CHAPTER 14 PROBLEMS P 14-1 Parent accounting under the equity method Pak purchased a 40 percent interest in Sco of Germany for $1,080.000 on Januar cost over book value is due to a patent with a 10-year amortization period. A summary of December 31, 2015, and at December 31, 2016, after translation into U.S. dollars i 30.000 on January 1, 2016. The excess period. A summary of Sco's net assets on into U.S. dollars, is as follows: Equity Adjustment Capital Stock $2,000,000 Retained Earnings $400,000 310,000 (192.000) December 31, 2015 Net income Dividends Translation adjustment December 31, 2016 Net Assets $2,400,000 310,000 (192,000) 212.000 $2,730.000 $212.000 $212,000 $2.000.000 $518,000 Exchange rates for euros were $1.14 on January 1, 2016; $1.16 average for 2016; $1.15 when dividends were declared; and $1.18 at December 31, 2016. Sco had net assets of 4,000,000 at Janu. ary 1, 2016; net income of 500,000 for 2016; and dividends of 300,000. It ended the year with net assets of 4,200,000. Sco's functional currency is the euro. REQUIRED 1. Calculate Pak's income from Sco for 2016. 2. Determine the balance of Pak's Investment in Seo account at December 31, 2016. 3. Develop a proof of your calculation of the Investment in Sco account balance at Decem P 14-2 REQUIRED 1. Calculate tax expense that should be reported each quarter. 2. Calculate income that should be reported each quarter. PROBLEMS P 15-1 Apply threshold tests Rise Corporation is based in the United States and its business is divided into segments based on geo graphical location. The following information has been accumulated for use in preparing segment dis- closures in 2016: Intersegment Sales ely OSS United States Canada Europe Latin America Japan Korea Singapore Other Unaffiliated Sales $250,000 200,000 130,000 120,000 100,000 50,000 20,000 10.000 $880,000 10,000 30,000 Total $250.000 200,000 130,000 130,000 130,000 50,000 30,000 10,000 $930.000 10,000 $50.000 REQUIRED 1. Determine Rise's reportable segment under the 10 percent revenue test. 2. Are additional reportable segments required? 3. Prepare a schedule to disclose segmented revenue and its reconciliation for 2016, P 15-2 whold tests in millions 36 CHAPTER 14 PROBLEMS P 14-1 Parent accounting under the equity method Pak purchased a 40 percent interest in Sco of Germany for $1,080.000 on Januar cost over book value is due to a patent with a 10-year amortization period. A summary of December 31, 2015, and at December 31, 2016, after translation into U.S. dollars i 30.000 on January 1, 2016. The excess period. A summary of Sco's net assets on into U.S. dollars, is as follows: Equity Adjustment Capital Stock $2,000,000 Retained Earnings $400,000 310,000 (192.000) December 31, 2015 Net income Dividends Translation adjustment December 31, 2016 Net Assets $2,400,000 310,000 (192,000) 212.000 $2,730.000 $212.000 $212,000 $2.000.000 $518,000 Exchange rates for euros were $1.14 on January 1, 2016; $1.16 average for 2016; $1.15 when dividends were declared; and $1.18 at December 31, 2016. Sco had net assets of 4,000,000 at Janu. ary 1, 2016; net income of 500,000 for 2016; and dividends of 300,000. It ended the year with net assets of 4,200,000. Sco's functional currency is the euro. REQUIRED 1. Calculate Pak's income from Sco for 2016. 2. Determine the balance of Pak's Investment in Seo account at December 31, 2016. 3. Develop a proof of your calculation of the Investment in Sco account balance at Decem P 14-2 REQUIRED 1. Calculate tax expense that should be reported each quarter. 2. Calculate income that should be reported each quarter. PROBLEMS P 15-1 Apply threshold tests Rise Corporation is based in the United States and its business is divided into segments based on geo graphical location. The following information has been accumulated for use in preparing segment dis- closures in 2016: Intersegment Sales ely OSS United States Canada Europe Latin America Japan Korea Singapore Other Unaffiliated Sales $250,000 200,000 130,000 120,000 100,000 50,000 20,000 10.000 $880,000 10,000 30,000 Total $250.000 200,000 130,000 130,000 130,000 50,000 30,000 10,000 $930.000 10,000 $50.000 REQUIRED 1. Determine Rise's reportable segment under the 10 percent revenue test. 2. Are additional reportable segments required? 3. Prepare a schedule to disclose segmented revenue and its reconciliation for 2016, P 15-2 whold tests in millions