FACCT $321$

Second Semester$-2024$

Case Study

Friedrich Company was created as a wholly owned subsidiary of Nietzsche Corporation on January $1,$ Year $1.$ On that date, Nietzsche invested $$57,000$ in Friedrich capital stock. Given the exchange rate on that date of $$0\mathrm{.}95$ per Brazilian Reals $($BRL$),$ the initial investment of $$57,000$ was converted into $60,000BRL.$ Other than the capital investment on January $1,$ there were no transactions involving stockholders' equity in Year $1.$ Friedrich's BRL$-$denominated financial statements for Year $2$ are as follows:

$\backslash$table$[[,\backslash$table$[[$Income Statement$],[$Year $2],[($By BRL$)]]],[$Sales$,650,000],[$Cost of goods sold,$(320,000)$riedrich Company was created as a wholly owned subsidiary of Nietzsche Corporation onJanuary $1,$ Year $1.$ On that date, Nietzsche invested $$57,000$ in Friedrich capital stock. Giventhe exchange rate on that date of $$0\mathrm{.}95$ per Brazilian Reals $($BRL$),$ the initial investment of$$57,000$ was converted into $60,000$ BRL$.$ Other than the capital investment on January $1,$ therewere no transactions involving stockholders equity in Year $1.$ Friedrichs BRL$-$denominatedfinancial statements for Year $2$ are as follows: