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151,200. Ship's net assets on the date of acquisition were 700,000 kroner (NKr). lorwegian subsidiary's identifiable assets and liabilities approximated their fair va atents acquired. The fair value of Ship's property, plant, and equipment exceede f Ship's equipment at January 1, 20X5, was 10 years. The remainder of the differe stimated useful life of 5 years. Ship's trial balance on December 31, 20X5, in kro Credits Cash Accounts Receivable (net) Inventory Property, Plant and Equipment Accumulated Depreciation Accounts Payable Notes Payable Common Stock Retained Earnings Sales Cost of Goods Sold Operating Expenses Depreciation Expense Dividends Paid Total Debits Nkr 150,000 200,000 270,000 600,000 Nkr 150,000 90,000 190,000 450,000 250,000 690,000 410,000 100,000 50,000 40,000 NKr 1,820,000 NKr 1,820,000

151,200. Ship's net assets on the date of acquisition were 700,000 kroner (NKr). lorwegian subsidiary's identifiable assets and liabilities approximated their fair va atents acquired. The fair value of Ship's property, plant, and equipment exceede f Ship's equipment at January 1, 20X5, was 10 years. The remainder of the differe stimated useful life of 5 years. Ship's trial balance on December 31, 20X5, in kro Credits Cash Accounts Receivable (net) Inventory Property, Plant and Equipment Accumulated Depreciation Accounts Payable Notes Payable Common Stock Retained Earnings Sales Cost of Goods Sold Operating Expenses Depreciation Expense Dividends Paid Total Debits Nkr 150,000 200,000 270,000 600,000 Nkr 150,000 90,000 190,000 450,000 250,000 690,000 410,000 100,000 50,000 40,000 NKr 1,820,000 NKr 1,820,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On January 1, 20X5, Pirate Company acquired all of the outstanding stock of Ship Incorporated, a Norwegian company, at a cost of $151,200. Ship's net assets on the date of acquisition were 700,000 kroner (NKr). On January 1, 20X5, the book and fair values of the Norwegian subsidiary's identifiable assets and liabilities approximated their fair values except for property, plant, and equipment and patents acquired. The fair value of Ship's property, plant, and equipment exceeded its book value by $18,000. The remaining useful life of Ship's equipment at January 1, 20X5, was 10 years. The remainder of the differential was attributable to a patent having an estimated useful life of 5 years. Ship's trial balance on December 31, 20X5, in kroner, follows: Cash Accounts Receivable (net) Inventory Property, Plant and Equipment Accumulated Depreciation Accounts Payable Notes Payable Common Stock Retained Earnings Sales Cost of Goods Sold Operating Expenses Depreciation Expense Dividends Paid Total Debits NKR 150,000 200,000 July 1, 20X3 December 30, 20X4 January 1, 20X5 July 1, 20X5 December 15, 20X5 December 31, 20X5 Average for 20X5 NKr 1 $ 0.15 NKr 1 = $0.18 NKr 1 = NKr 1 NKr 1 = NKr 1 NKr 1 = $0.20 270,000 600,000 410,000 100,000 50,000 40,000 NKr 1,820,000 NKr 1,820,000 Additional Information: 1. Ship uses the FIFO method for its inventory. The beginning inventory was acquired on December 31, 20X4, and ending inventory was acquired on December 15, 20X5. Purchases of NKr420,000 were made evenly throughout 20X5. 2. Ship acquired all of its property, plant, and equipment on July 1, 20X3, and uses straight-line depreciation. 3. Ship's sales were made evenly throughout 20X5, and its operating expenses were incurred evenly throughout 20X5. 4. The dividends were declared and paid on July 1, 20X5. 5. Pirate's income from its own operations was $275,000 for 20X5, and its total stockholders' equity on January 1, 20X5, was $3,500,000. Pirate declared $100,000 of dividends during 20X5. 6. Exchange rates were as follows: $ 0.18 $ 0.19 Credits $ 0.205 $ 0.21 Nkr 150,000 90,000 190,000 450,000 250,000 690,000 Required: a. Prepare a schedule translating the trial balance from Norwegian kroner into U.S. dollars. Assume the krone is the functional currency.
Transcribed Image Text:On January 1, 20X5, Pirate Company acquired all of the outstanding stock of Ship Incorporated, a Norwegian company, at a cost of $151,200. Ship's net assets on the date of acquisition were 700,000 kroner (NKr). On January 1, 20X5, the book and fair values of the Norwegian subsidiary's identifiable assets and liabilities approximated their fair values except for property, plant, and equipment and patents acquired. The fair value of Ship's property, plant, and equipment exceeded its book value by $18,000. The remaining useful life of Ship's equipment at January 1, 20X5, was 10 years. The remainder of the differential was attributable to a patent having an estimated useful life of 5 years. Ship's trial balance on December 31, 20X5, in kroner, follows: Cash Accounts Receivable (net) Inventory Property, Plant and Equipment Accumulated Depreciation Accounts Payable Notes Payable Common Stock Retained Earnings Sales Cost of Goods Sold Operating Expenses Depreciation Expense Dividends Paid Total Debits NKR 150,000 200,000 July 1, 20X3 December 30, 20X4 January 1, 20X5 July 1, 20X5 December 15, 20X5 December 31, 20X5 Average for 20X5 NKr 1 $ 0.15 NKr 1 = $0.18 NKr 1 = NKr 1 NKr 1 = NKr 1 NKr 1 = $0.20 270,000 600,000 410,000 100,000 50,000 40,000 NKr 1,820,000 NKr 1,820,000 Additional Information: 1. Ship uses the FIFO method for its inventory. The beginning inventory was acquired on December 31, 20X4, and ending inventory was acquired on December 15, 20X5. Purchases of NKr420,000 were made evenly throughout 20X5. 2. Ship acquired all of its property, plant, and equipment on July 1, 20X3, and uses straight-line depreciation. 3. Ship's sales were made evenly throughout 20X5, and its operating expenses were incurred evenly throughout 20X5. 4. The dividends were declared and paid on July 1, 20X5. 5. Pirate's income from its own operations was $275,000 for 20X5, and its total stockholders' equity on January 1, 20X5, was $3,500,000. Pirate declared $100,000 of dividends during 20X5. 6. Exchange rates were as follows: $ 0.18 $ 0.19 Credits $ 0.205 $ 0.21 Nkr 150,000 90,000 190,000 450,000 250,000 690,000 Required: a. Prepare a schedule translating the trial balance from Norwegian kroner into U.S. dollars. Assume the krone is the functional currency.
Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D Prepare a schedule translating the trial balance from Norwegian kroner into U.S. dollars. Assume the krone is the functional currency. Note: If no adjustment is needed, select 'No entry necessary'. Item Cash Accounts Receivable (net) Inventory Property, Plant and equipment Cost of Goods Sold Operating Expenses Depreciation Expense Dividends Paid Total No Entry Necessary Total Debits Accumulated Depreciation Accounts Payable Notes Payable Common Stock Retained Earnings Sales Total PIRATE INCORPORATED Trial Balance Translation December 31, 20X5 Accumulated other Comprehensive Income - Translation Adjustment Total credits < Required A $ 31,500 42,000 56,700 126,000 82,000 20,000 10,000 7,600 $ 375,800 $ $ Balance Dollars 375,800 31,500 18,900 39,900✔ 81,000 45,000 138,000 354,300 1,000 $ 355,300 $ Required B >
Transcribed Image Text:Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D Prepare a schedule translating the trial balance from Norwegian kroner into U.S. dollars. Assume the krone is the functional currency. Note: If no adjustment is needed, select 'No entry necessary'. Item Cash Accounts Receivable (net) Inventory Property, Plant and equipment Cost of Goods Sold Operating Expenses Depreciation Expense Dividends Paid Total No Entry Necessary Total Debits Accumulated Depreciation Accounts Payable Notes Payable Common Stock Retained Earnings Sales Total PIRATE INCORPORATED Trial Balance Translation December 31, 20X5 Accumulated other Comprehensive Income - Translation Adjustment Total credits < Required A $ 31,500 42,000 56,700 126,000 82,000 20,000 10,000 7,600 $ 375,800 $ $ Balance Dollars 375,800 31,500 18,900 39,900✔ 81,000 45,000 138,000 354,300 1,000 $ 355,300 $ Required B >
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