Diekmann Company, a U$.$S$.-$based company, acquired a $100$ percent interest in Rakona A$.$S$.$ in the Czech Republic on January $1,2019,$ when the exchange rate for the Czech koruna $($K$$s$)$ was $\backslash$$$0\mathrm{.}05.$ Rakona's financial statements as of December $31,2020,$ two years later, follow:

Additional Information

$-$ The Januarv $1.2020.$ beainnina inventorv of K$$s $6\mathrm{.}000\mathrm{.}000$ was acauired on December $18.2019.$ when the exchanae rate was $\backslash (\backslash$$ $0\mathrm{.}043\backslash ).$ Purchases of inventorv were acauired

Additional Information

$-$ The January $1,2020,$ beginning inventory of K$$s $\backslash (6,000,000\backslash )$ was acquired on December $18,2019,$ when the exchange rate was $\backslash (\backslash$$ $0\mathrm{.}043\backslash ).$ Purchases of inventory were acquired uniformly during $2020.$ The December $31,2020,$ ending inventory of K$$s $\backslash (8,500,000\backslash )$ was acquired in the latter part of $2020$ when the exchange rate was $\backslash (\backslash$$ $0\mathrm{.}032\backslash ).$ All depreciable assets $($equipment and buildings$)$ were on the books when the subsidiary was acquired$-$except for K$$s $\backslash (5,000,000\backslash )$ of equipment acquired on January $3,2020,$ when the exchange rate was $\backslash (\backslash$$ $0\mathrm{.}036\backslash ),$ and K$$s $12,000,000$ in buildings acquired on March $5,2020,$ when the exchange rate was $\backslash (\backslash$$ $0\mathrm{.}034\backslash ).$ Straight$-$line depreciation is $10$ years for equipment and $40$ years for buildings. A full year's depreciation is taken in the year of acquisition.

$-$ Dividends were declared and paid on December $15,2020,$ when the exchange rate was $\backslash (\backslash$$ $0\mathrm{.}031\backslash ).$

$-$ Other exchange rates for $1$ K$$s follow:

Translate the Czech koruna financial statements at December $31,2020,$ in the following three situations:

a$.$ The Czech koruna is the functional currency. The December $31,2019,$ U$.$S$.$ dollar$-$translated balance sheet reported retained earnings of $\backslash (\backslash$$ $22,500\backslash ).$ The December $31,2019,$ cumulative translation adjustment was negative $\backslash$$$202,500($debit balance$).$

b$.$ The U$.$S$.$ dollar is the functional currency. The December $31,2019,$ U$.$S$.$ dollar$-$remeasured balance sheet reported retained earnings $($including a $2019$ remeasurement gain$)$ of $\backslash$$$353,000.$

c$.$ The U$.$S$.$ dollar is the functional currency. Rakona has no long$-$term debt. Instead, it has common stock of K$$s $20,000,000$ and additional paid$-$in capital of K$$s $50,000,000.$ The December $31,2019,$ U$.$S$.$ dollar$-$remeasured balance sheet reported a negative balance in retained earnings of $\backslash$$$147,000($including a $2019$ remeasurement loss$).$

Complete this question by entering your answers in the tabs below.

Translate the Czech koruna financial statements at December $31,2020$ assuming the Czech koruna is the functional currency. The December $31,2019,$ U$.$S$.$ dollar$-$translated balance sheet reported retained earnings of $\backslash (\backslash$$ $22,500\backslash ).$ The December $31,2019,$ cumulative translation adjustment was negative $\backslash (\backslash$$ $202,500\backslash )($debit balance$).($Amounts to be deducted and negative amounts should be indicated with a minus sign.$)$ Required $\backslash ($ A $\backslash )$

Required B

Required C

Translate the Czech koruna financial statements at December $31,2020$ assuming the Czech koruna is the functional currency. The December $31,2019,$ U$.$S$.$ dollar$-$translated balance sheet reported retained earnings of $\backslash (\backslash$$ $22,500\backslash ).$ The December $31,2019,$ cumulative translation adjustment was negative $\backslash (\backslash$$ $202,500\backslash )($debit balance$).($Amounts to be deducted and negative amounts should be indicated with a minus sign.$)$

$\backslash$begin$\{$tabular$\}\{|$l$|$l$|\}$

$\backslash$hline Income Statement: & US$\backslash$$ $\backslash \backslash$

$\backslash$hline & $\backslash \backslash$

$\backslash$hline & $\backslash \backslash$

$\backslash$hline & $\backslash \backslash$

$\backslash$hline & $\backslash \backslash$

$\backslash$hline & $\backslash \backslash$

$\backslash$hline & $\backslash \backslash$

$\backslash$hline & $\backslash \backslash$

$\backslash$hline & $\backslash \backslash$

$\backslash$hline & $\backslash \backslash$

$\backslash$hline & $\backslash \backslash$

$\backslash$hline Balance Sheet: & $\backslash \backslash$

$\backslash$hline Assets: & $\backslash \backslash$

$\backslash$hline & $\backslash \backslash$

$\backslash$hline & $\backslash \backslash$

$\backslash$hline & $\backslash \backslash$

$\backslash$hline & $\backslash \backslash$

$\backslash$hline & $\backslash \backslash$

$\backslash$hline & $\backslash \backslash$

$\backslash$hline & $\backslash \backslash$

$\backslash$hline & $\backslash \backslash$

$\backslash$hline

$\backslash$end$\{$tabular$\}$ Required $\backslash ($ A $\backslash )$

Required B

Required C

Translate the Czech koruna financial statements at December $31,2020$ assuming the U$.$S$.$ dollar is the functional currency. The December $31,2019,$ U$.$S$.$ dollar$-$remeasured balance sheet reported retained earnings $($including a $2019$ remeasurement gain$)$ of $\backslash (\backslash$$ $353,000\backslash ).($Amounts to be deducted and negative amounts should be indicated with a minus sign.$)$

$\backslash$begin$\{$tabular$\}\{|$l$|$l$|\}$

$\backslash$hline Income Statement: & US$\backslash$$ $\backslash \backslash$

$\backslash$hline & $\backslash \backslash$

$\backslash$hline & $\backslash \backslash$

$\backslash$hline & $\backslash \backslash$

$\backslash$hline & $\backslash \backslash$

$\backslash$hline & $\backslash \backslash$

$\backslash$hline & $\backslash \backslash$

$\backslash$hline Income before remeasurement gain & $\backslash \backslash$

$\backslash$hline Remeasurement gain, $2020$ & $\backslash \backslash$

$\backslash$hline & $\backslash \backslash$

$\backslash$hline & $\backslash \backslash$

$\backslash$hline & $\backslash \backslash$

$\backslash$hline & $\backslash \backslash$

$\backslash$hline Balance Sheet: & $\backslash \backslash$

$\backslash$hline Assets: & $\backslash \backslash$

$\backslash$hline & $\backslash \backslash$

$\backslash$hline & $\backslash \backslash$

$\backslash$hline & $\backslash \backslash$

$\backslash$hline & $\backslash \backslash$

$\backslash$hline & $\backslash \backslash$

$\backslash$hline & $\backslash \backslash$

$\backslash$hline & $\backslash \backslash$

$\backslash$hline

$\backslash$end$\{$tabular$\}$ Required A

Required B

Required C

Translate the Czech koruna financial statements at December $31,2020$ assuming the U$.$S$.$ dollar is the functional currency. Rakona has no long$-$term debt. Instead, it has common stock of K$$s $20,000,000$ and additional paid$-$in capital of K$$s $50,000,000.$ The December $31,2019,$ U$.$S$.$ dollar$-$remeasured balance sheet reported a negative balance in retained earnings of $\backslash (\backslash$$ $147,000\backslash )($including a $2019$ remeasurement loss$).($Amounts to be deducted and negative amounts should be indicated with a minus sign.$)$

Show less $4$

$\backslash$begin$\{$tabular$\}\{|$l$|$l$|\}$

$\backslash$hline & US$\backslash$$ $\backslash \backslash$

$\backslash$hline Income Statement: & $\backslash \backslash$

$\backslash$hline & $\backslash \backslash$

$\backslash$hline & $\backslash \backslash$

$\backslash$hline & $\backslash \backslash$

$\backslash$hline & $\backslash \backslash$

$\backslash$hline & $\backslash \backslash$

$\backslash$hline & $\backslash \backslash$

$\backslash$hline Income before remeasurement gain & $\backslash \backslash$

$\backslash$hline Remeasurement loss, $2020$ & $\backslash \backslash$

$\backslash$hline & $\backslash \backslash$

$\backslash$hline & $\backslash \backslash$

$\backslash$hline & $\backslash \backslash$

$\backslash$hline & $\backslash \backslash$

$\backslash$hline Balance Sheet: & $\backslash \backslash$

$\backslash$hline Assets: & $\backslash \backslash$

$\backslash$hline & $\backslash \backslash$

$\backslash$hline & $\backslash \backslash$

$\backslash$hline & $\backslash \backslash$

$\backslash$hline & $\backslash \backslash$

$\backslash$hline

$\backslash$end$\{$tabular$\}$

Snipping Tool

Screenshot copied to clipboard

Automatically saved to screenshots folder.

Markup and share