On January 1, 2014, Trenten Systems, a U.S.-based company, purchased a controlling interest in Grant Management Consultants located in Zurich, Switzerland. The acquisition was treated as a purchase transaction. The 2014 financial statements stated in Swiss francs are given below.

GRANT MANAGEMENT CONSULTANTS
Comparative Balance Sheets
January 1 and December 31, 2014
	Jan. 1	Dec. 31
Cash and Receivables	20,000	54,400
Net Property, Plant, and Equipment	40,600	37,100
Totals	60,800	91,100
Accounts and Notes Payable	30,600	32,300
Common Stock	20,400	20,400
Retained Earnings	9,800	38,400
Totals	60,800	91,100

GRANT MANAGEMENT CONSULTANTS
Consolidated Income and Retained Earnings Statement
for the Year Ended December 31, 2014
Revenues	73,500
Operating Expenses including Depreciation of 3,500 francs	30,200
Net Income	43,300
Dividends Declared and Paid	14,700
Increase in Retained Earnings	28,600

Direct exchange rates for Swiss franc are:

Dollars per Franc
January 1, 2014	$0.5987
December 31, 2014	0.5321
Average for 2014	0.5654
Dividend declaration and payment date	0.5810

(a) Convert (premeasure) the financial statements of the foreign subsidiary using the temporal method of translation.

(b) Prepare a schedule to verify the translation gain or loss.

Answer rating: 100% (QA)

a Conversion of Financial Statements using the Temporal Method Cash and Receivables20000 CHF11974 05... View the full answer