Given data

Financial Statements, $2024$ Santa Monica Inc Parati SA

USD BRL

Sales $20,000,0002,000,000$

Cost of goods sold $(9,400,000)(1,200,000)$

Salary expense $(1,800,000)(150,000)$

Rent expense $(600,000)(100,000)$

Other expenses $(220,000)(120,000)$

Dividend income$-$from Parati $20,000-$

Gain on sale of building, $10/1/24-70,000$

Net income $8,000,000500,000$

Retained earnings, $1/1/244,000,000200,000$

Net income $8,000,000500,000$

Dividends, $6/1/24(2,500,000)(100,000)$

Retained earnings, $12/31/249,500,000600,000$

Cash and receivables $3,000,000200,000$

Inventory $9,900,000600,000$

Prepaid expenses $100,000-$

Investment in Parati $($initial value$)500,000-$

Property, plant, and equipment $($net$)40,000,000900,000$

Total assets $53,500,0001,700,000$

Accounts payable $3,400,000150,000$

Notes payable $-$ due in $3$ years $1,600,000250,000$

Common stock $30,000,000500,000$

Additional paid$-$in capital $9,000,000200,000$

Retained earnings, $12/31/249,500,000600,000$

Total liabilities and equities $53,500,0001,700,000$

$2023$ Parati SA

BRL

Net income $300,000$

Dividends, $6/1/23(100,000)$

Retained earnings, $12/31/23200,000$

$2024$ Parati SA

BRL

Parati misclassifed prepaid rent as rent expense $20,000$

Exchange Rates USD$/$BRL

January $1,20230\mathrm{.}220$

June $1,20230\mathrm{.}212$

Weighted average rate for $20230\mathrm{.}210$

December $31,20230\mathrm{.}205$

June $1,20240\mathrm{.}200$

October $1,20240\mathrm{.}175$

Weighted average rate for $20240\mathrm{.}185$

December $31,20240\mathrm{.}170$

Required:

a$-1.$ Translate Parati's $2024$ Brazilian real $($BRL$)$ financial statements into U$.$S$.$ dollars $($USD$).$

a$-2.$ Prepare the schedule $1-$ translation of retained earnings, $12/31/23.$

a$-3.$ Prepare the schedule $2-$ calculation of cumulative translation adjustment, $12/31/24.$

b$-1.$ Prepare the $12/31/24$ Consolidation Worksheet for Santa Monica and Parati.

b$-2.$ Show the calculation of excess of acquisition consideration over book value $($Land revaluation$).$

b$-3.$ Show the calculation of cumulative translation adjustment related to excess of acquisition consideration over book value.

Answer rating: 100% (QA)

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