Kerry records its operations and prepares financial statements in euros. However, its functional currency is the British pound. Kerry was organized and acquired by the U.S. company on June 1, 20X4. The cumulative translation adjustment as of December 31, 20X6, was $79,860. The value of the subsidiary's retained earnings expressed in British pounds and U.S. dollars as of December 31, 20X7, was 365,000 pounds and $618,000, respectively. On March 1, 20X7, Kerry declared a dividend of 120,000 euros. The trial balance of Kerry in marks as of December 31, 20X7, is as follows:

The marketable securities were acquired on November 1, 20X6, and the prepaid insurance was acquired on December 1, 20X7. The cost of goods sold and the ending inventory are calculated by the weighted-average method. The underlying costs have been incurred uniformly throughout the year. On June 1, 20X4, 60% of the depreciable assets existed, and the balance was acquired on March 1, 20X6. The depreciable assets are amortized over a 10-year period by the straight-line method. Of the total depreciation expense, 80% is traceable to the cost of goods sold and the balance is in general expenses. On November 1, 20X6, Kerry received a customer prepayment valued at 3,000,000 euros. On February 1, 20X7, 2,040,000 euros of the prepayment was earned. The balance remains unearned as of December 31, 20X7.

The following items are measured in pound at the December 31, 20x7.
	Euros	Pounds
Accumulated depreciation
Depreciable Assets	8,730,000	2,671,380
Cost of Goods Sold	17,697,000	5,262,294
Selling, General, Admin. Expense	4,762,000	1,415,886
Accumulated Depreciation	1,417,000	773,915
Sales Revenue	26,430,000	7,866,030

Required:

Prepare a remeasured and translated trial balance of the Kerry Manufacturing

Transcribed Image Text:

Debit Credit Cash Accounts Receivable Inventory (at cost) Marketable Securities (at cost) Prepaid Insurance Depreciable Assets Accumulated Depreciation Cost of Goods Sold Selling, General, and Administrative Expense Sales Revenue Investment Income 240,000 2,760,000 3,720,000 2,040,000 210,000 8,730,000 1,417,000 17,697,000 4,762,000 Accounts Payable Unearned Sales Revenue Loans and Mortgage Payable Common Stock Paid-in Capital in Excess of Par Retained Earnings Total 26,430,000 180,000 2,120,000 960,000 5,872,000 1,500,000 210,000 1,470,000 40,159,000 40,159,000 ====== ========== Debit Credit Cash Accounts Receivable Inventory (at cost) Marketable Securities (at cost) Prepaid Insurance Depreciable Assets Accumulated Depreciation Cost of Goods Sold Selling, General, and Administrative Expense Sales Revenue Investment Income 240,000 2,760,000 3,720,000 2,040,000 210,000 8,730,000 1,417,000 17,697,000 4,762,000 Accounts Payable Unearned Sales Revenue Loans and Mortgage Payable Common Stock Paid-in Capital in Excess of Par Retained Earnings Total 26,430,000 180,000 2,120,000 960,000 5,872,000 1,500,000 210,000 1,470,000 40,159,000 40,159,000 ====== ==========

Answer rating: 100% (QA)

Trial balance of Kerry Manufacturing Company Accounts Balance in Euros Relevant exchange rate PdsEur... View the full answer