U.S. Industries has a subsidiary in Switzerland. The subsidiary's financial statements are maintained in Swiss francs (CHF).
Question:
The following items appear in the subsidiary's trial balance at December 31,2014:
1. Cash in bank, CHF4,000,000.
2. Inventory on LIFO basis, CHF3,000,000. The inventory cost consists of CHF1,000,000 acquired in January 2012 and CHF2,000,000 acquired in January 2014.
3. Machinery and equipment, CHF11,000,000. A review of the records indicates that the company bought equipment costing CHF5,000,000 in January 2012 (20 percent of this was sold in January 2014) and additional equipment costing CHF7,000,000 in January 2013. Ignore accumulated depreciation.
4. Depreciation expense on machinery and equipment, CHF1,100,000 (depreciated over ten years, straight-line basis).
Required
Calculate the dollar amount for each of the above items, assuming the functional currency of the Swiss subsidiary is (a) the U.S. dollar and (b) the Swiss franc.
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
Step by Step Answer:
Advanced Accounting
ISBN: 978-1934319307
2nd edition
Authors: Susan S. Hamlen, Ronald J. Huefner, James A. Largay III