On January 1, Year 4, Domino purchased 100 percent of the outstanding common shares of Chess...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
On January 1, Year 4, Domino purchased 100 percent of the outstanding common shares of Chess for 50,000 foreign currency units (FC). Chess is located in Zania. On January 1, Year 4, it had common shares of FC30.000 and retained earnings of FC10.000. At the date of acquisition, the ocquisition differential was allocated entirely to buildings, with a remaining useful life of 20 years. Chess's financial statements et December 31, Year 5, are shown below in the FC of its native country: INCOME STATEMENT for the Year Ended December 31, Year 5 Sales Beginning inventory FC 130,000 15,000 Purchases 66,000 (12,000) 69,000 Ending inventory Cost of goods sold Gross profit Operating expenses Depreciation expense 61,000 31,000 12,000 Profit FC 18,000 STATEMENT OF FINANCIAL POSITION Plant and equipment (net) Inventory Current monetary assets FC 34,000 15,000 43,000 FC 92.000 Common shares FC 30,000 15,000 Retained earnings 10% bonds payable 20,000 27,000 FC 92,000 Current monetary liabilities Soles, purchases, and operating expenses were made evenly throughout the year. Year-end inventory was purchased at the year-end rate. Equipment odditions of FC5,000 with a useful life of five years were purchased on January 1, Year 5. There were no other purcheses or sales of capital assets in Year 4 or Year 5. In Year 4, Chess earned FC20,000 and paid dividends of FC18,000. In Year 5, Chess paid dividends of FC15,000. Dividends were declared and paid on December 31 of each year. The bonds payable were issued on January 1, Year 4, and mature on January 1, Year 9. Chess's net current monetary position ot December 31, Year 4, was FC10,000. Chess's retained earnings at December 31, Year 4, were FC12,000. Exchange rates at various dates are given below. January 1, Year 4 Average, Year 4 January 1, Year 5 Average, Year 5 December 31, Year 5 FC1= $2.05 FC1 = $2.15 FC1= $2.20 FC1 = $2.25 FC1 = $2.30 Which of the following amounts would be reported as cost of goods sold on Chess's translated financial statements at December 31, Year 5, ossuming it is on integrated subsidiary (ie., the functional currency of the foreign operation is the same as the parent)? $143,900 $143,100 $145,250 $148,700 On January 1, Year 4, Domino purchased 100 percent of the outstanding common shares of Chess for 50,000 foreign currency units (FC). Chess is located in Zania. On January 1, Year 4, it had common shares of FC30.000 and retained earnings of FC10.000. At the date of acquisition, the ocquisition differential was allocated entirely to buildings, with a remaining useful life of 20 years. Chess's financial statements et December 31, Year 5, are shown below in the FC of its native country: INCOME STATEMENT for the Year Ended December 31, Year 5 Sales Beginning inventory FC 130,000 15,000 Purchases 66,000 (12,000) 69,000 Ending inventory Cost of goods sold Gross profit Operating expenses Depreciation expense 61,000 31,000 12,000 Profit FC 18,000 STATEMENT OF FINANCIAL POSITION Plant and equipment (net) Inventory Current monetary assets FC 34,000 15,000 43,000 FC 92.000 Common shares FC 30,000 15,000 Retained earnings 10% bonds payable 20,000 27,000 FC 92,000 Current monetary liabilities Soles, purchases, and operating expenses were made evenly throughout the year. Year-end inventory was purchased at the year-end rate. Equipment odditions of FC5,000 with a useful life of five years were purchased on January 1, Year 5. There were no other purcheses or sales of capital assets in Year 4 or Year 5. In Year 4, Chess earned FC20,000 and paid dividends of FC18,000. In Year 5, Chess paid dividends of FC15,000. Dividends were declared and paid on December 31 of each year. The bonds payable were issued on January 1, Year 4, and mature on January 1, Year 9. Chess's net current monetary position ot December 31, Year 4, was FC10,000. Chess's retained earnings at December 31, Year 4, were FC12,000. Exchange rates at various dates are given below. January 1, Year 4 Average, Year 4 January 1, Year 5 Average, Year 5 December 31, Year 5 FC1= $2.05 FC1 = $2.15 FC1= $2.20 FC1 = $2.25 FC1 = $2.30 Which of the following amounts would be reported as cost of goods sold on Chess's translated financial statements at December 31, Year 5, ossuming it is on integrated subsidiary (ie., the functional currency of the foreign operation is the same as the parent)? $143,900 $143,100 $145,250 $148,700
Expert Answer:
Answer rating: 100% (QA)
The results and financial position of an entity whose functional currency is not the currency of a h... View the full answer
Related Book For
Modern Advanced Accounting in Canada
ISBN: 978-1259087554
7th edition
Authors: Hilton Murray, Herauf Darrell
Posted Date:
Students also viewed these accounting questions
-
Supercritical fluid chromatography (eng. supercritical fluid chromatography, SFC) uses man carbon dioxide/methanol in the mobile phase (90/10) and the column is a packed column with polar 5 m silica...
-
Multiplex purchased 100 percent of the outstanding common stock of Lipley Company for $900,000. At the time of the acquisition, the fair market values of Lipleys individual assets and liabilities...
-
Prime Publishing, Inc., purchased 100 percent of the outstanding common stock of Select Media, Inc., on January 1, 2014, for $3,000,000. The following schedule outlines how the purchase price was...
-
A firm has four service centers, S1, S2, S3, and S4, which provide services to each other, as well as to three operating divisions, A, B, and C. The distribution of each service centers output as...
-
When Collingwood Corp. issued its 60-day commercial paper the promised yield was 9 percent, whereas the 60-day T-bill yield was 6 percent. There is a 2-percent chance that Collingwood will default on...
-
Research the issue of voice assistants and privacy protection. Start by reading Collins (2017) and Huff (2017).
-
The following data refer to a compound impulse turbine having two rows of moving blades and one row of fixed blades in between them. Nozzle angle \(=15^{\circ}\), Exit velocity of steam from the...
-
R. J. Winter Co. recently issued $100,000, 10-year deferred interest bonds. The bonds have a stated rate of 10%, and interest is to be paid in 10 semiannual payments beginning in Year 6. The market...
-
The Law Society of Ontario (LSO) has brought an application alleging that John Clarke, a paralegal, failed to maintain books and records as required by By-law 9. The LSO also asserted that the...
-
Read and answer the question below. EMBRACE DEMOGRAPHICS AND SOCIETAL CHANGES Using Differences to Drive Value Force 7: Demographics and Societal Changes. One of the most important forces that is...
-
4. Two solid shafts (G=75 GPa) are connected using gears as shown. Shaft ACEG has a diameter of 50 mm and shaft BDF has a diameter of 30 mm. The ends of the shafts are fixed at A and B, and the...
-
Using an incremental internal rate of return (IRR) analysis, the decision to replace the "current best" by the "challenger"' is based on what decision rule? a. The internal rate of return of the...
-
The production department of Zunni's Manufacturing is considering two numerically controlled drill presses; one must be selected. Comparison data is shown in the table below. MARR is 10 percent/year....
-
The cash flows associated with a project are shown below. The interest rate varies from year to year as shown. Determine an equivalent uniform annual series of cash flows. EOY Cash Flow Interest...
-
Reconsider the data from Problem 56. What is the capital recovery cost of Model 334A? Data from problem 56 Octavia Bakery is planning to purchase one of two ovens. The expected cash flows for each...
-
Consider the net cash flows and salvage values shown below. Assume the alternatives can be indefinitely renewed with the same cash flows and salvage values. Using a MARR of 8%, specify the planning...
-
lo If you see a web address beginning with https://, that means the website encryption (or code) you are clicking on is most likely secure and free from potential malware attacks. O True O False 6|...
-
The comparative statements of financial position of Menachem NV at the beginning and end of the year 2019 appear below. Net income of ¬34,000 was reported, and dividends of ¬23,000 were paid...
-
Parento Inc. owns 80% of Santana Corp. The consolidated financial statements of Parento follow: Parento Inc. purchased its 80% interest in Santana Corp. on January 1, Year 2, for $114,000 when...
-
Tropical Juices Limited (Tropical) was incorporated under Canadian federal legislation two years ago as a 50:50 joint venture of Citrus Growers Cooperative (Citrus) of the United States and Bottle...
-
On January 1, Year 5, FLA Company issued 6,300 ordinary shares to purchase 9,000 ordinary shares of MES Company. Prior to the acquisition, FLA had 180,000 and MES had 10,000 ordinary shares...
-
Repeat Exercise 13.3, but this time work on the assumption that non-current assets that had originally cost :30,000, with accumulated depreciation of :12,000, had been sold during the year ended 31...
-
Study Figure 13.6. Write a short report on Bayers management of its cash flows over the period reported. Figure 13.6 Bayer Group's consolidated statement of cash flows Income after taxes Income taxes...
-
Expenses and revenues are subjective; cash flows are facts. Therefore cash flow statements cannot mislead. Discuss.
Study smarter with the SolutionInn App