Part 2:

This week's assignment will be a draft of Part 2 of the portfolio project. The final version of Part 2 of the project is due, along with Part 1, in their final versions with Part 3 as the Portfolio Project for this class.

Regarding the England factory, what currency will be used in preparing the year end consolidated financial statements for 20x7? Explain which method is appropriate to use at year-end: translation or remeasurement?

Prepare the journal entries to record the formation of the partnership on January 1, 20x7, and to record the events that occurred in during 20x9. Prepare the Income Statement and Balance Sheet for the year ended 20x7. Due to the huge success of the business she expanded to Europe in 20x7, opening another factory in England. The recording currency of the England factory is the Euro and the functional currency is the Pound sterling.

In 20x9 Alexandria formed a partnership in Florida with her brother, Nelson. Alexandria and her brother both contributed the following assets:

	Alexandria	Nelson
Cash	$61,100	$50,800
Inventories	80,900	0
Land	0	131,500
Equipment	101,400	0

The land was subject to a $51,600 mortgage, which the partnership assumed on January 1, 20x9. The equipment was subject to an installment note payable that had an unpaid principal amount of $21,200 on January 1, 20x9. The partnership also assumed this note payable. Alexandria and Nelson agreed to share partnership income and losses in the following manner:

	Alexandria	Nelson
Interest on beg. Capital balances	3%	3%
Salaries	$13,900	$13,900
Remainder	60%	40%

During 20x9, the following events occurred:

• Inventory was acquired at a cost of $31,400. At December 31, 20x9, the partnership owed $6,300 to its suppliers.
• Principal of $5,700 was paid on the mortgage. Interest expense incurred on the mortgage was $2,000, all of which was paid by December 31, 20x9.
• Principal of $3,300 was paid on the installment note. Interest expense incurred on the installment note was $2,300, all of which was paid by December 31, 20x9.
• Sales on account amounted to $162,000. At December 31, 20x9, customers owed the partnership $21,900.
• Selling and general expenses, excluding depreciation, amounted to $34,400. At December 31, 20x9, the partnership owed $7,100 of accrued expenses. Depreciation expense was $6,700.
• Each partner withdrew $230 each week in anticipation of partnership profits.
• The partnership's inventory at December 31, 20x9, was $20,700.
• The partners allocated the net income for 20x9 and closed the accounts.