On January 1, 2020, Larmer Corp (a Canadian company) purchased 80% of Martin Inc, an American...

 

 

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On January 1, 2020, Larmer Corp (a Canadian company) purchased 80% of Martin Inc, an American company, for USSO00 Martin's book values approximated its fair values on that date except for plant and equipment, which had a fair value of USS30000 with a remaining life expectancy of 5 years. A goodwill impairment loss of US$1000 occurred during 2020. Martir's January 1, 2020 Balance Sheet is shown below (in US. dollars): $50.000 $40,000 $25,000 $115,000 $45,000 $20,000 $30.000 $20,000 Current Monetary Assets nventory Plant and Equipment Total Assets Current Liabilities Bonds Payable (maturity January 1, 2026) Common Shares Retained Earmings Total Liabilities and Equity $115,000 The following exchange rates were in effect during 2020: January 1, 2020. Average for 2020: Date when Ending Inventory Purchased: December 31, 2020: US $1= CDN $1.3250 US $1= CDN S1.3350 US $1= CDN $1.34 US $1= CDN $1.35 Sales, purchases and other expenses occurred evenly throughout the year. Dividends declared and paid December 31, 2020. The financial statements of Larmer (in Canadian dollars) and Martin (in U.S. dollars) are shown below: Balance Sheets Larmer Martin $65,000 $50,000 $20,000 $42,050 $60,000 $23,500 $66,250 $191,800 $50,000 $35,000 $60,000 $30,000 $28,800 ($12,000) $191,800 Larmer Current Monetary Assets Inventory Plant and Equipment Investment in Martin (at Cost) Assets Current Liabilities Bonds Payable (maturity: January 1, 2026) Common Shares Retained Earnings Net Income Dividends Liabilities and Equity $135,000 $48,000 $20,000 $30,000 $20,000 $27,000 ($10,000) $135,000 Martin $50,000 Income Statements Sales Dividend Income Cost of Sales $80,000 $10,800 ($40,000 ($10,000) ($12.000 $28.800 ($15.000 ($5.000 ($3,000 $27.000 Depreciation Other expenses Net Income Compute Martin's exchange gain or loss for 2020 if Martin's functional currency was the Canadian dollar (i.e. the same functional currency as the parent). Short Answer Toolbar navigation. 三。 A B IUS On January 1, 2020, Larmer Corp (a Canadian company) purchased 80% of Martin Inc, an American company, for USSO00 Martin's book values approximated its fair values on that date except for plant and equipment, which had a fair value of USS30000 with a remaining life expectancy of 5 years. A goodwill impairment loss of US$1000 occurred during 2020. Martir's January 1, 2020 Balance Sheet is shown below (in US. dollars): $50.000 $40,000 $25,000 $115,000 $45,000 $20,000 $30.000 $20,000 Current Monetary Assets nventory Plant and Equipment Total Assets Current Liabilities Bonds Payable (maturity January 1, 2026) Common Shares Retained Earmings Total Liabilities and Equity $115,000 The following exchange rates were in effect during 2020: January 1, 2020. Average for 2020: Date when Ending Inventory Purchased: December 31, 2020: US $1= CDN $1.3250 US $1= CDN S1.3350 US $1= CDN $1.34 US $1= CDN $1.35 Sales, purchases and other expenses occurred evenly throughout the year. Dividends declared and paid December 31, 2020. The financial statements of Larmer (in Canadian dollars) and Martin (in U.S. dollars) are shown below: Balance Sheets Larmer Martin $65,000 $50,000 $20,000 $42,050 $60,000 $23,500 $66,250 $191,800 $50,000 $35,000 $60,000 $30,000 $28,800 ($12,000) $191,800 Larmer Current Monetary Assets Inventory Plant and Equipment Investment in Martin (at Cost) Assets Current Liabilities Bonds Payable (maturity: January 1, 2026) Common Shares Retained Earnings Net Income Dividends Liabilities and Equity $135,000 $48,000 $20,000 $30,000 $20,000 $27,000 ($10,000) $135,000 Martin $50,000 Income Statements Sales Dividend Income Cost of Sales $80,000 $10,800 ($40,000 ($10,000) ($12.000 $28.800 ($15.000 ($5.000 ($3,000 $27.000 Depreciation Other expenses Net Income Compute Martin's exchange gain or loss for 2020 if Martin's functional currency was the Canadian dollar (i.e. the same functional currency as the parent). Short Answer Toolbar navigation. 三。 A B IUS

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