Using the Assignment Option 2 spreadsheet (linked at the bottom of this page), review the financial statements for a translation of foreign subsidiary statements for consolidation with the parent company.

Required: Prepare the consolidation of foreign subsidiary to U.S. parent business combinations at its acquisition date.

Follow instructions from the worksheet carefully. Use formulas to enter amounts and data. Show details of your calculations and processes. Explain each journal entry or why one was omitted.

Consolidation at Acquisition Date of Foreign Subsidiary into the U.S. Parent, Push Corporation on Jan 02, 20x7

Information:

1)

Push Corporation purchased Summer British Corp on Jan 02, 20x7, for 100% control.

2)

The local currency for Summer Britain Corp is the British Pound. This is the functional currency.

3)

The British Subsidiary had revenue of $10,000. Push Corp received $10,000 Dollars with a U.S. Company when the exchange rate was $1.20 = (GBP) 1.00.

4)

Relevant Spot exchange rates ($/ GBP)

(One GBP equals the values at the time)

Date

Rate

1/2/20x7

1.3

20x7 Average

1.35

20x7 Aver

1.35

							Basic Eliminating Entry 01/02/20x7			Debit	Credit
							Common Stock
							Paid In Capital
							Retained Earnings
							Good will
								Investment
			1/2/20x7
Subsidiary US ($)	Parent		Stock Acquisition		Parent	Subsidiary	Eliminating entries		Total Consolidated Statement on 01/02/20x7
			DEBIT	Credit			Debit	Credit
	1,800,000					20,000
	20,000					10,000
	100,000					40,000
	30,000					40,000
	300,000					300,000
	-150,000					-200,000
	0					0
	2,100,000					0
	0					210,000
	100,000					50,000
	500,000					50,000
	700,000					50,000
	800,000					60,000
	2,100,000					210,000