Below are the 2020 financial statements of the StarterCompany These statements are in Euros but following U.S. GAAP Income Statement For the year 2020 900000 200000 Revenue Operating Expenses Depreciation Gain on sale of building 100000 50000 net income 650000 Balance Sheet December 31 2020 Cash 40000 accounts payable 200000 accounts receivable 20000 Building Accumulated Depreciation 900000 Common stock 300000 100000 retained earnings 660000 land 300000 otal assets 1160000 Dther information: On 112012 When Vabrum Company established StarterCompany by claiming the 300000 shares of stock the Euro was worth $1 When StarterCompany purchased the land the Euro was worth $1.10 When StarterCompany purchased the building the Euro was worth $0.98 On 112012 When Vabrum Company established StarterCompany by claiming the 300000 shares of stock the Euro was worth $1 On December 31st 2019 StarterCompany retained earnings was $725,000 On December 31st 2019 StarterCompany retained earnings was $725,000 During 2020 the average exchange rate was 1Euro = $108 On December 31st 2020 the exchange rate was 1Euro = $111 On July 29th when the building was sold, the Euro was $107 On October 2nd, StarterCompany declared and paid a 20000 Euro dividend when the Euro was worth $103 REQUIRED: CONVERT THE FINANCIAL STATEMENTS INTO DOLLARS IF THE DOLLAR IS THE FUNCTIONAL CURRENCY OF StarterCOMPANY
Below are the 2020 financial statements of the StarterCompany These statements are in Euros but following U.S. GAAP Income Statement For the year 2020 900000 200000 Revenue Operating Expenses Depreciation Gain on sale of building 100000 50000 net income 650000 Balance Sheet December 31 2020 Cash 40000 accounts payable 200000 accounts receivable 20000 Building Accumulated Depreciation 900000 Common stock 300000 100000 retained earnings 660000 land 300000 otal assets 1160000 Dther information: On 112012 When Vabrum Company established StarterCompany by claiming the 300000 shares of stock the Euro was worth $1 When StarterCompany purchased the land the Euro was worth $1.10 When StarterCompany purchased the building the Euro was worth $0.98 On 112012 When Vabrum Company established StarterCompany by claiming the 300000 shares of stock the Euro was worth $1 On December 31st 2019 StarterCompany retained earnings was $725,000 On December 31st 2019 StarterCompany retained earnings was $725,000 During 2020 the average exchange rate was 1Euro = $108 On December 31st 2020 the exchange rate was 1Euro = $111 On July 29th when the building was sold, the Euro was $107 On October 2nd, StarterCompany declared and paid a 20000 Euro dividend when the Euro was worth $103 REQUIRED: CONVERT THE FINANCIAL STATEMENTS INTO DOLLARS IF THE DOLLAR IS THE FUNCTIONAL CURRENCY OF StarterCOMPANY
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:The StarterCompany is a French subsidiary owned by the American Company Vabrum Company!
Below are the 2020 financial statements of the StarterCompany
These statements are in Euros but following U.S. GAAP
Income Statement For the year 2020
900000
Revenue
Operating Expenses
Depreciation
Gain on sale of building
200000
100000
50000
net income
650000
Balance Sheet
December 31 2020
Cash
40000
accounts payable
200000
accounts receivable
20000
Building
Accumulated Depreciation
900000
Common stock
300000
100000
retained earnings
660000
land
300000
total assets
1160000
Other information:
On 112012 When Vabrum Company established StarterCompany by claiming the 300000 shares of stock the Euro was worth $1
When StarterCompany purchased the land the Euro was worth $1. 10
When StarterCompany purchased the building the Euro was worth $0.98
On 112012 When Vabrum Company established StarterCompany by claiming the 300000 shares of stock the Euro was worth $1
On December 31st 2019 StarterCompany retained earnings was $725,000
On December 31st 2019 StarterCompany retained earnings was $725,000
During 2020 the average exchange rate was 1Euro = $1.08
On December 31st 2020 the exchange rate was 1Euro = $1.11
On July 29th when the building was sold, the Euro was $1.07
On October 2nd, StarterCompany declared and paid a 20000 Euro dividend when the Euro was worth $1.03
REQUIRED: CONVERT THE FINANCIAL STATEMENTS INTO DOLLARS IF THE DOLLARIS THE FUNCTIONAL CURRENCY
OF StarterCOMPANY
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