Dorsey Corporation purchased 90% of the common stock of Lansing Company on January 1, 2008. The cost of the investment was equal to the book value interest acquired. Lansing Company operates two retail stores and an exporting business in London that specializes in buying and selling British tweeds. The subsidiary provided the following financial statements in pounds to the parent company: LANSING COMPANY Consolidated Income and Retained Earnings Statement for the Year Ended December 31, 2014 Sales 2,820,000 Cost of Goods Sold (1,280,000 ) Depreciation Expense (280,000 ) Other Expenses (414,000 ) Net Income 846,000 1/1 Retained Earnings 853,000 1,699,000 Less: Dividends Declared and Paid, December 31 (322,000 ) 12/31 Retained Earnings 1,377,000 LANSING COMPANY Balance Sheet December 31, 2014 Cash and Receivables 1,140,000 Inventory 529,000 Property, Plant, and Equipment 3,680,000 Total 5,349,000 Current Liabilities 572,000 Long-Term Notes Payable 1,210,000 Common Stock 2,190,000 Retained Earnings 1,377,000 Total 5,349,000 Lansing Company was incorporated on January 1, 2006, at which time all the property, plant, and equipment was purchased. The long-term notes were issued to partially finance the purchase of the fixed assets. Direct exchange rates for the British pound are as follows: January 1, 2006 $1.8996 January 1, 2008 1.8365 Average for the last quarter 2013 1.5300 January 1, 2014 1.4919 December 31, 2014 1.4730 Average for 2014 1.4788 Average for August–December 2014 1.4950 The January 1, 2014, retained earnings balance of Lansing in dollars was $1,510,197, and the cumulative translation adjustment was a debit balance of $940,082. The beginning inventory of £430,000 was acquired during the last quarter of 2013 and the ending inventory was acquired during the last five months of 2014. Sales were made and purchases and other expenses were incurred evenly during the year. Translate the December 31, 2014, account balances of Lansing Company into dollars assuming that the pound is the functional currency of Lansing Company. (Round answers to 0 decimal places, e.g. 5,125. Enter loss and debit cumulative translation adjustment using either a negative sign preceding the number e.g. -2,945 or parentheses e.g. (2,945).) Adjusted Trial Balance (£) Translation Rate Adjusted Trial Balance ($) Consolidated Income and Retained Earnings Statement $ : Balance Sheet Total

Dorsey Corporation purchased 90% of the common stock of Lansing Company on January 1, 2008. The cost of the investment was equal to the book value interest acquired. Lansing Company operates two retail stores and an exporting business in London that specializes in buying and selling British tweeds. The subsidiary provided the following financial statements in pounds to the parent company: LANSING COMPANY Consolidated Income and Retained Earnings Statement for the Year Ended December 31, 2014 Sales 2,820,000 Cost of Goods Sold (1,280,000 ) Depreciation Expense (280,000 ) Other Expenses (414,000 ) Net Income 846,000 1/1 Retained Earnings 853,000 1,699,000 Less: Dividends Declared and Paid, December 31 (322,000 ) 12/31 Retained Earnings 1,377,000 LANSING COMPANY Balance Sheet December 31, 2014 Cash and Receivables 1,140,000 Inventory 529,000 Property, Plant, and Equipment 3,680,000 Total 5,349,000 Current Liabilities 572,000 Long-Term Notes Payable 1,210,000 Common Stock 2,190,000 Retained Earnings 1,377,000 Total 5,349,000 Lansing Company was incorporated on January 1, 2006, at which time all the property, plant, and equipment was purchased. The long-term notes were issued to partially finance the purchase of the fixed assets. Direct exchange rates for the British pound are as follows: January 1, 2006 $1.8996 January 1, 2008 1.8365 Average for the last quarter 2013 1.5300 January 1, 2014 1.4919 December 31, 2014 1.4730 Average for 2014 1.4788 Average for August–December 2014 1.4950 The January 1, 2014, retained earnings balance of Lansing in dollars was $1,510,197, and the cumulative translation adjustment was a debit balance of $940,082. The beginning inventory of £430,000 was acquired during the last quarter of 2013 and the ending inventory was acquired during the last five months of 2014. Sales were made and purchases and other expenses were incurred evenly during the year. Translate the December 31, 2014, account balances of Lansing Company into dollars assuming that the pound is the functional currency of Lansing Company. (Round answers to 0 decimal places, e.g. 5,125. Enter loss and debit cumulative translation adjustment using either a negative sign preceding the number e.g. -2,945 or parentheses e.g. (2,945).) Adjusted Trial Balance (£) Translation Rate Adjusted Trial Balance ($) Consolidated Income and Retained Earnings Statement $ : Balance Sheet Total

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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LANSING COMPANY Consolidated Income and Retained Earnings Statement for the Year Ended December 31, 2014
Sales	2,820,000
Cost of Goods Sold	(1,280,000	)
Depreciation Expense	(280,000	)
Other Expenses	(414,000	)
Net Income	846,000
1/1 Retained Earnings	853,000
	1,699,000
Less: Dividends Declared and Paid, December 31	(322,000	)
12/31 Retained Earnings	1,377,000

LANSING COMPANY Balance Sheet December 31, 2014
Cash and Receivables		1,140,000
Inventory		529,000
Property, Plant, and Equipment		3,680,000
Total		5,349,000
Current Liabilities		572,000
Long-Term Notes Payable		1,210,000
Common Stock		2,190,000
Retained Earnings		1,377,000
Total		5,349,000

Lansing Company was incorporated on January 1, 2006, at which time all the property, plant, and equipment was purchased. The long-term notes were issued to partially finance the purchase of the fixed assets.

Direct exchange rates for the British pound are as follows:

January 1, 2006		$1.8996
January 1, 2008		1.8365
Average for the last quarter 2013		1.5300
January 1, 2014		1.4919
December 31, 2014		1.4730
Average for 2014		1.4788
Average for August–December 2014		1.4950

The January 1, 2014, retained earnings balance of Lansing in dollars was $1,510,197, and the cumulative translation adjustment was a debit balance of $940,082. The beginning inventory of £430,000 was acquired during the last quarter of 2013 and the ending inventory was acquired during the last five months of 2014. Sales were made and purchases and other expenses were incurred evenly during the year.

Translate the December 31, 2014, account balances of Lansing Company into dollars assuming that the pound is the functional currency of Lansing Company. (Round answers to 0 decimal places, e.g. 5,125. Enter loss and debit cumulative translation adjustment using either a negative sign preceding the number e.g. -2,945 or parentheses e.g. (2,945).)

	Adjusted Trial Balance (£)	Translation Rate	Adjusted Trial Balance ($)
Consolidated Income and Retained Earnings Statement
		$






:

Balance Sheet









Total

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