Accounting for Business Combinations: The trial balance of Honesty Company at December 31, 2022, a 100% owned subsidiary of ABC Company, is presented below (denominated in US dollars) (see image below). Additional information: The subsidiary started operation in February 2021 and the capital stock transactions occurred on that date. The Bonds Payable was transacted in November 2021. Property and Equipment were acquired in April 2021. The dividends were declared in June 2022. The translated amount of Retained Earnings at the beginning of the year is P14,100,000. Apply the temporal method. Exchange rate at various dates follow: February 2021 - 53.00; April 2021 - 54.00; November 2021 - 50.00; December 2021 - 52.00; January 2022 - 49.00; June 2022 - 55.00; December 2022 - 46.00; and Average (2022) - 47.25 Solve for the following subquestions: a. How much is the Translation Amount of Net Income? b. How much is the Translated Amount of Assets? c. How much is the Translated Amount of Liabilities? ____________________
Accounting for Business Combinations: The trial balance of Honesty Company at December 31, 2022, a 100% owned subsidiary of ABC Company, is presented below (denominated in US dollars) (see image below). Additional information: The subsidiary started operation in February 2021 and the capital stock transactions occurred on that date. The Bonds Payable was transacted in November 2021. Property and Equipment were acquired in April 2021. The dividends were declared in June 2022. The translated amount of Retained Earnings at the beginning of the year is P14,100,000. Apply the temporal method. Exchange rate at various dates follow: February 2021 - 53.00; April 2021 - 54.00; November 2021 - 50.00; December 2021 - 52.00; January 2022 - 49.00; June 2022 - 55.00; December 2022 - 46.00; and Average (2022) - 47.25 Solve for the following subquestions: a. How much is the Translation Amount of Net Income? b. How much is the Translated Amount of Assets? c. How much is the Translated Amount of Liabilities? ____________________
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Accounting for Business Combinations:
The
Additional information:
- The subsidiary started operation in February 2021 and the capital stock transactions occurred on that date.
- The Bonds Payable was transacted in November 2021.
- Property and Equipment were acquired in April 2021.
- The dividends were declared in June 2022.
- The translated amount of
Retained Earnings at the beginning of the year is P14,100,000. - Apply the temporal method.
- Exchange rate at various dates follow: February 2021 - 53.00; April 2021 - 54.00; November 2021 - 50.00; December 2021 - 52.00; January 2022 - 49.00; June 2022 - 55.00; December 2022 - 46.00; and Average (2022) - 47.25
Solve for the following subquestions:
a. How much is the Translation Amount of Net Income?
b. How much is the Translated Amount of Assets?
c. How much is the Translated Amount of Liabilities?
____________________
Transcribed Image Text:Cash
Accounts Receivable
Inventory
Property and Equipment
Accumulated Depreciation
Accounts Payable
Bonds Payable
Share Capital
Retained Earnings
Revenue
Cost of Sales
Operating Expenses
Depreciation Expense
Dividends
Total
120,000
300,000
440,000
1,750,000
600,000
431,250
175,000
50,000
3,866,250
306,250
225,000
585,000
1,000,000
250,000
1,500,000
3,866,250
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