On January 1, 20X1, Himalaya Corporation organized Alps Company as a subsidiary in Switzerland with an initial investment cost of Swiss francs (SFr) 120,000. Alps's December 31, 20X1, trial balance in SFr is as follows: Debit (SFr) Credit(SFr) Cash 14000 Accounts Receivable 40000 Receivable from Himalaya 10000 Inventory 50000 Plant and Equipment 200000 Accumulated Depreciation 20000 Accounts Payable 24000 Bonds Payable 100000 Common Stock 120000 Sales 300000 Cost of goods sold 140000 Depreciation Expense 20000 Operating Expense 60000 Dividend paid 30000 Total SFr564,000 SFr 564,000 Additional Information The receivable from Himalaya is denominated in Swiss francs. Himalaya's books show a $8,000 payable to Alps. Purchases of inventory goods are made evenly during the year. Items in the ending inventory were purchased November 1. Equipment is depreciated by the straight-line method with a 10-year life and no residual value. A full year's depreciation is taken in the year of acquisition. The equipment was acquired on March 1. The dividends were declared and paid on November 1. Exchange rates were as follows: January 1 1SFr=$.73 March 1 1SFr=$.74 November 1 1SFr=$.77 December 31 1SFr=$.80 20X1 Average 1SFr=$.75 The Swiss franc is the functional currency. Required (a) Prepare a schedule translating the December 31, 20X1, trial balance from Swiss francs to dollars. (b) Prepare a proof of the translation adjustment computed

FINANCIAL ACCOUNTING

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ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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On January 1, 20X1, Himalaya Corporation organized Alps Company as a subsidiary in Switzerland with an initial investment cost of Swiss francs (SFr) 120,000. Alps's December 31, 20X1, trial balance in SFr is as follows:

	Debit (SFr)	Credit(SFr)
Cash	14000
Accounts Receivable	40000
Receivable from Himalaya	10000
Inventory	50000
Plant and Equipment	200000
Accumulated Depreciation		20000
Accounts Payable		24000
Bonds Payable		100000
Common Stock		120000
Sales		300000
Cost of goods sold	140000
Depreciation Expense	20000
Operating Expense	60000
Dividend paid	30000
Total	SFr564,000	SFr 564,000

Additional Information

The receivable from Himalaya is denominated in Swiss francs. Himalaya's books show a $8,000 payable to Alps.
Purchases of inventory goods are made evenly during the year. Items in the ending inventory were purchased November 1.
Equipment is depreciated by the straight-line method with a 10-year life and no residual value. A full year's depreciation is taken in the year of acquisition. The equipment was acquired on March 1.
The dividends were declared and paid on November 1.
Exchange rates were as follows:

January 1	1SFr=$.73
March 1	1SFr=$.74
November 1	1SFr=$.77
December 31	1SFr=$.80
20X1 Average	1SFr=$.75

The Swiss franc is the functional currency.

Required

(a) Prepare a schedule translating the December 31, 20X1, trial balance from Swiss francs to dollars.

(b) Prepare a proof of the translation adjustment computed

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