a)Calculate the translation adjustment from this subsidiary for X Be sure to indicate whether it is a debit or credit balance. Hint: use proof of translation adjustment method b)What amount should Plum record as income from Snap on its book? c) What is the balance of investment in Snap account reported on Plum's book on December before consolidation? d)Determine the amount of Plum's consolidated net income for 20x8 e)Determine the amount of Plum's consolidated comprehensive income for 20x8 f) compute Plum's total consolidated stockholders'equity at December 31, 20x8
On January 1, 20X8, Plum Company acquired all of the outstanding stock of Snap PLC, a British Company, for $300,000. Snap's net
assets on the date of acquisition were 220,000 pounds ( £ ). On January 1,2018, the book and fair values of the Snap's identifiable assets
and liabilities approximated their fair values except for equipment. The remaining useful life of Snap's equipment at January 1,20×8, was
10 years.
During 20X8, Snap earned 80,000 pounds in income and declared and paid 10,000 pounds in dividends. The dividends were declared
and paid in pounds on November 1,20×8.
Plum's income from its own operations was $160,000 for 20X8. Plum's total
declared $90,000 of dividends during 20X8. Assume Plum uses the fully adjusted equity method to account for its investment in Snap.
Management has determined that the pound is Snap's appropriate functional currency. Relevant exchange rates were as follows:
January 1,20×8,$1.20=1£
November 1,20×8,$1.21=1£
December 31,20×8,$1.28=1£
Average for 20×8,$1.25=1£
b)What amount should Plum record as income from Snap on its book?
e)Determine the amount of Plum's consolidated comprehensive income for 20x8
f) compute Plum's total consolidated stockholders'equity at December 31, 20x8
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
