Debit FC Balances Credit FC Balances Current assets .. Depreciable assets (net). Other assets..... Cost of sales. .. Other expenses . 250,000 350,000 125,000 Capital stock ... Retained earnings Sales ... Accounts payable . Other liabilities . 166,000 194,000 140,000 134,000 720,000 504,000 125,000 Total... 1,354,000 Total.... 1,354,000 Prefabco had net income and dividends, declared at year-end and paid in the first quarter of the next year, subsequent to Techno's acquisition as follows along with selected rates of exchange: Average Dollar /FC Year-end Net Income Dividends Dollar/FC Last 9 months of 2013. 72,000 91,500 126,000 2.18 240,000 305,000 2.10 2014... 2.25 2.21 2015.... 420,000 2.34 2.40
Techno Builders has acquired a 70% interest in the equity of a foreign company, Prefabco, whose functional currency is the FC. Although Prefabco began operations in June 2012 when 1 FC equaled $1.95, Techno did not acquire its interest until March 31, 2013, when 1 FC equaled $2.08. Techno paid 400,000 FC for its interest in Prefabco when the subsidiary’s condensed preclosing
Prepare a schedule to determine the balance in Techno’s account ‘‘Investment in Prefabco’’ as of year-end 2015 and also prepare all of the entries that would be necessary to eliminate the investment account in a worksheet to consolidate the parent company and its subsidiary for the year 2015. Techno uses the simple equity method to account for its interest in the subsidiary.
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