Sleech Ltd operates an information systems company. The firm is preparing its 30 June financial statements, and
Question:
Sleech Ltd operates an information systems company. The firm is preparing its 30 June financial statements, and requires advice concerning the proper treatment of the following situations. Explain how to deal with each situation, and prepare any required journal entries.
The finance minister of a foreign country in which one of its subsidiaries is located, T.G. Cee, has informed Sleech Ltd of her government's intention to expropriate funds from the subsidiary. T.G. Cee indicates that the best outcome Sleech Ltd could expect is to receive 60 per cent of the fair value of the subsidiary's property as settlement. The carrying amount of the (wholly owned) subsidiary is $12 900 000 and the estimated fair value is $15 000 000.
Financial Accounting An Integrated Statements Approach
ISBN: 978-0324312119
2nd Edition
Authors: Jonathan E. Duchac, James M. Reeve, Carl S. Warren