On January 1 , 2 0 2 4 , Joey Co . acquired a subsidiary in Italy
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Question:
On January Joey Co acquired a subsidiary in Italy named Legoria Co Legoria s functional currency is the EURO which is also its the local currency LCUie the currency in which Legoria Co maintains its records in Selected exchange rates are as follows:
January FCU $
December FCU $
average FCU $
The following Trial balance for Legoria is available for
Account Balance in Euros
Cash FCU
Accounts Receivable
Allowance for doubtful accts.
Due From Joey
Inventory
Prepaid Insurance
Land
Depreciable Assets
Accumulated Depreciation
Cost of Goods Sold
Depreciation Expense
Income Tax Expense
Other Expenses
Total FCU
Accounts Payable FCU
Taxes Payable
Accrued Interest Payable
Bonds Payable
Common Stock
Retained Earnings
Sales
Total FCU
Required: Prepare a schedule translating the trial balance into the reporting currency of Joey Co to facilitate the consolidation process.
Assuming Parent Uses Equity Method, what is the Journal entry the Parent would make on its books to account for the Translation Adjustment?
Would Joey Co need to Record a Consolidation Entry to Consolidate Legoria Co on related to the Translation Adjustment.
A Yes or No
B If answer in part A is yes, describe the entry needed. If the answer is No describe why the entry is not needed.
Assume Joey Cos Subsidiary is in a Highly Inflationary economy.
A What method would Joey Co use to translate its subsidiarys trial balance?
B Where would the gain or loss be reported?
Related Book For
Advanced Accounting
ISBN: 9780132568968
11th Edition
Authors: Floyd A. Beams, Joseph H. Anthony, Bruce Bettinghaus, Kenneth Smith
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