January 1.. April 1.... June 1..... Weighted average December 31..... $1.71 1.59 1.66 1.64 1.62 Deblts Credits ко 8.000 Cash Accounts receivable Equipment Accumulated depreciation Land....... Accounts payable Notes payable (due 2025) Common stock 9,000 3,000 ка 600 5,000 3,000 5,000 10,000 Dividends declared (6/1/17) Sales Salary expense Depreciation expense Miscellaneous expenses 4,000 25,000 5,000 600 9,000 Totals кО 43,600 кО 43,600
Kingsfield establishes a subsidiary operation in a foreign country on January 1, 2017. The country’s currency is the kumquat (KQ). To start this business, Kingsfield invests 10,000 kumquats. Of this amount, it spends 3,000 kumquats immediately to acquire equipment. Later, on April 1, 2017, it also purchases land. All subsidiary operational activities occur at an even rate throughout the year. The U.S. dollar ($) exchange rates for the kumquat for 2017 follow:
As of December 31, 2017, the subsidiary reports the following
A corporation based in East Lansing, Michigan, Kingsfield uses the U.S. dollar as its reporting currency.
a. Assume that the subsidiary’s functional currency is the kumquat. Prepare a trial balance for it in U.S. dollars so that 2017 consolidated financial statements can be prepared.
b. Assume that the subsidiary’s functional currency is the U.S. dollar. Prepare a trial balance for it in U.S. dollars so that 2017 consolidated financial statements can be prepared.
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