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Cash Accounts Receivable (net) Inventory Property, Plant and Equipment Cost of Goods Sold Operating Expenses Depreciation Expense Dividends Paid Total Total Debits Accumulated Depreciation Accounts Payable Notes Payable Common Stock Retained Earnings Sales Total Total Credits View transaction list PIRATE INC. Trial Balance Translation December 31, 20X5 No 1 Date January 01 Item View journal entry worksheet S Investment in Ship Company Cash Balance Dollars S S b. Assume that Pirate uses the fully adjusted equity method. Record all Journal entries that relate to its Investment in the Norwegian subsidiary during 20X5. Provide the necessary documentation and support for the amounts in the journal entries, including a schedu of the translation adjustment related to the differential. (If no entry is required for a transaction/event, select "No journal entry required" In the first account field.) 219,380 12,530 1,746 35,640 78,720 46,800 146,000 S 321,436 82,000 23,200 105,440 8,740 219,380 $ 321,436 General Journal Debit 156,600 Credit 156,600

Cash Accounts Receivable (net) Inventory Property, Plant and Equipment Cost of Goods Sold Operating Expenses Depreciation Expense Dividends Paid Total Total Debits Accumulated Depreciation Accounts Payable Notes Payable Common Stock Retained Earnings Sales Total Total Credits View transaction list PIRATE INC. Trial Balance Translation December 31, 20X5 No 1 Date January 01 Item View journal entry worksheet S Investment in Ship Company Cash Balance Dollars S S b. Assume that Pirate uses the fully adjusted equity method. Record all Journal entries that relate to its Investment in the Norwegian subsidiary during 20X5. Provide the necessary documentation and support for the amounts in the journal entries, including a schedu of the translation adjustment related to the differential. (If no entry is required for a transaction/event, select "No journal entry required" In the first account field.) 219,380 12,530 1,746 35,640 78,720 46,800 146,000 S 321,436 82,000 23,200 105,440 8,740 219,380 $ 321,436 General Journal Debit 156,600 Credit 156,600

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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Cash Accounts Receivable (net) Inventory Property, Plant and Equipment Cost of Goods Sold Operating Expenses Depreciation Expense Dividends Paid Total Total Debits Accumulated Depreciation Accounts Payable Notes Payable Common Stock Retained Earnings Sales Total Total Credits View transaction list PIRATE INC. Trial Balance Translation December 31, 20X5 No 1 Date January 01 Item View journal entry worksheet Investment in Ship Company Cash Balance Dollars $ $ $ $ $ b. Assume that Pirate uses the fully adjusted equity method. Record all Journal entries that relate to its Investment in the Norwegian subsidiary during 20X5. Provide the necessary documentation and support for the amounts in the journal entries, including a schedule of the translation adjustment related to the differential. (If no entry is required for a transaction/event, select "No Journal entry required" In the first account field.) 82,000 23,200 105,440 8,740 219,380 219,380 12,530 1,746 35,640 78,720 46,800 146,000 321,436 321,436 General Journal Debit 156,600 Credit 156,600
Transcribed Image Text:Cash Accounts Receivable (net) Inventory Property, Plant and Equipment Cost of Goods Sold Operating Expenses Depreciation Expense Dividends Paid Total Total Debits Accumulated Depreciation Accounts Payable Notes Payable Common Stock Retained Earnings Sales Total Total Credits View transaction list PIRATE INC. Trial Balance Translation December 31, 20X5 No 1 Date January 01 Item View journal entry worksheet Investment in Ship Company Cash Balance Dollars $ $ $ $ $ b. Assume that Pirate uses the fully adjusted equity method. Record all Journal entries that relate to its Investment in the Norwegian subsidiary during 20X5. Provide the necessary documentation and support for the amounts in the journal entries, including a schedule of the translation adjustment related to the differential. (If no entry is required for a transaction/event, select "No Journal entry required" In the first account field.) 82,000 23,200 105,440 8,740 219,380 219,380 12,530 1,746 35,640 78,720 46,800 146,000 321,436 321,436 General Journal Debit 156,600 Credit 156,600
On January 1, 20X5, Pirate Company acquired all of the outstanding stock of Ship Inc., a Norwegian company, at a cost of $156,600. 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: Credits Cash Accounts Receivable (net) Inventory Property, Plant & 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 159,000 221,000 279,000 611,000 410,000 116,000 53,000 43,000 NKr1,892,000 July 1, 20X3 December 30, 20X4 January 1, 20X5 July 1, 20X5 December 15, 20X5 December 31, 20X5 Average for 20X5 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 NKr430,000 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. NKr 167,000 97,000 198,000 440,000 260,000 730,000 5. Pirate's income from its own operations was $234,000 for 20X5, and its total stockholders' equity on January 1, 20X5, was $3,500,000. Pirate declared $130,000 of dividends during 20X5. 6. Exchange rates were as follows: NKr $ 1 = 0.15 NKr1,892,000 1 = 0.18 1 = 0.18 1 = 0.19 1 = 0.205 1 = 0.21 1 = 0.20 Required: a. Prepare a schedule translating the trial balance from Norwegian kroner into U.S. dollars. Assume the krone is the functional currency. (If no adjustment is needed, select 'no entry necessary'.)
Transcribed Image Text:On January 1, 20X5, Pirate Company acquired all of the outstanding stock of Ship Inc., a Norwegian company, at a cost of $156,600. 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: Credits Cash Accounts Receivable (net) Inventory Property, Plant & 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 159,000 221,000 279,000 611,000 410,000 116,000 53,000 43,000 NKr1,892,000 July 1, 20X3 December 30, 20X4 January 1, 20X5 July 1, 20X5 December 15, 20X5 December 31, 20X5 Average for 20X5 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 NKr430,000 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. NKr 167,000 97,000 198,000 440,000 260,000 730,000 5. Pirate's income from its own operations was $234,000 for 20X5, and its total stockholders' equity on January 1, 20X5, was $3,500,000. Pirate declared $130,000 of dividends during 20X5. 6. Exchange rates were as follows: NKr $ 1 = 0.15 NKr1,892,000 1 = 0.18 1 = 0.18 1 = 0.19 1 = 0.205 1 = 0.21 1 = 0.20 Required: a. Prepare a schedule translating the trial balance from Norwegian kroner into U.S. dollars. Assume the krone is the functional currency. (If no adjustment is needed, select 'no entry necessary'.)
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