At the beginning of 2019, Euro Cup Enterprises invested 500,000 FC of capital to form a wholly owned foreign subsidiary. The foreign subsidiary manufactures and sells its products with the foreign currency (FC) being its functional currency. During the year 2019, the foreign subsidiary reported earnings of 100,000 EC. The foreign subsidiary has declared dividends of 20,000 FC each on both December 1, 2019, and December 1, 2020. At the end of 2020, the subsidiary has the following trial balance in FC: Debit (Credit) FC Current Assets 140,000 Equipment 400,000 Accumulated Depreciation-Equipment (80,000) Land and Building 665,000 Accumulated Depreciation-Building (20,000) Current Liabilities (180,000) Noncurrent Notes Payable (300,000) Common Stock (500,000) Retained Earnings (net of dividends) (60,000) Sales Revenue (185,000) Cost of Sales 90,000 Operating Expenses 30,000 Total 0 Relevant exchange rates are as follows: Beginning of Year Average for Year December 1 End of Year 2019 1 FC = $1.25 1 FC = $1.30 1 FC = $1.33 1 FC = $1.34 2020 1 FC = $1.34 1 FC = $1.32 1 FC = $1.29 1 FC = $1.28 Prepare a translated trial balance assuming that the FC is the functional currency
At the beginning of 2019, Euro Cup Enterprises invested 500,000 FC of capital to form a wholly owned foreign
subsidiary. The foreign subsidiary manufactures and sells its products with the foreign currency (FC) being its
functional currency. During the year 2019, the foreign subsidiary reported earnings of 100,000 EC. The foreign
subsidiary has declared dividends of 20,000 FC each on both December 1, 2019, and December 1, 2020. At the
end of 2020, the subsidiary has the following
Debit (Credit) FC
Current Assets 140,000
Equipment 400,000
Land and Building 665,000
Accumulated Depreciation-Building (20,000)
Current Liabilities (180,000)
Noncurrent Notes Payable (300,000)
Common Stock (500,000)
Sales Revenue (185,000)
Cost of Sales 90,000
Operating Expenses 30,000
Total 0
Relevant exchange rates are as follows:
Beginning of
Year
Average for
Year December 1 End of Year
2019 1 FC = $1.25 1 FC = $1.30 1 FC = $1.33 1 FC = $1.34
2020 1 FC = $1.34 1 FC = $1.32 1 FC = $1.29 1 FC = $1.28
Prepare a translated trial balance assuming that the FC is the functional currency
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