On January 1, 20X1, Popular Creek Corporation organized SunTime Company as a subsidiary in Switzerland with an initial investmentcost of Swiss francs (SFr) 71,000. SunTime's December 31, 20X1, trial balance in SFr is as follows:CashAccounts Receivable (net)Receivable from Popular CreekInventoryPlant and EquipmentAccumulated DepreciationAccounts PayableBonds PayableCommon StockSalesCost of Goods SoldDepreciation ExpenseOperating ExpenseDividends PaidTotalAdditional InformationJanuary 1March 1DebitSFr 8,30023,0007,00028,000110,000SFr 1 = $ 0.73SFr 1 = $ 0.74SFr 1 $ 0.77SFr 1 =$ 0.80SFr 1 = $ 0.7570,50011,10031,00018,000SFr 306,900CreditSFr 11,10012,40052,00071,000160,4001. The receivable from Popular Creek is denominated in Swiss francs. Popular Creek's books show a $6,000 payable to SunTime.2. Purchases of inventory goods are made evenly during the year. Items in the ending inventory were purchased November 1.3. Equipment is depreciated by the straight-line method with a 10-year life and no residual value. A full year's depreciation is taken inthe year of acquisition. The equipment was acquired on March 1.4. The dividends were declared and paid on November 1.5. Exchange rates were as follows:SFr 306,900November 1December 3120X1 average6. The Swiss franc is the functional currency.Required:a. Prepare a proof of the translation adjustment.b. Where is the translation adjustment reported on Popular Creek's consolidated financial statements and its foreign subsidiary?

On January 1, 20X1, Popular Creek Corporation organized SunTime Company as a subsidiary in Switzerland with an initial investment cost of Swiss francs (SFr) 71,000. SunTime's December 31, 20X1, trial balance in SFr is as follows: Cash Accounts Receivable (net) Receivable from Popular Creek Inventory Plant and Equipment Accumulated Depreciation Accounts Payable Bonds Payable Common Stock Sales Cost of Goods Sold Depreciation Expense Operating Expense Dividends Paid Total Debit SFr 8,300 23,000 7,000 28,000 110,000 70,500 11,100 31,000 18,000 SFr 306,900 Credit SFr 11,100 12,400 52,000 71,000 160,400 SFr 306,900

On January 1, 20X1, Popular Creek Corporation organized SunTime Company as a subsidiary in Switzerland with an initial investment cost of Swiss francs (SFr) 71,000. SunTime's December 31, 20X1, trial balance in SFr is as follows: Cash Accounts Receivable (net) Receivable from Popular Creek Inventory Plant and Equipment Accumulated Depreciation Accounts Payable Bonds Payable Common Stock Sales Cost of Goods Sold Depreciation Expense Operating Expense Dividends Paid Total Debit SFr 8,300 23,000 7,000 28,000 110,000 70,500 11,100 31,000 18,000 SFr 306,900 Credit SFr 11,100 12,400 52,000 71,000 160,400 SFr 306,900

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Following are preacquisition financial balances for Padre Company and Sol Company as of December 31. Also included are fair values for Sol Company accounts. Cash Receivables Inventory Items Land Building and equipment (net) Franchise agreements Accounts payable Accrued expenses Long-term liabilities Common stock-$20 par value Common stock-$5 par value Additional paid-in capital Retained earnings, 1/1 Revenues Expenses Inventory Land Padre Company Book Values 12/31 $ 115,250 240,750 440,000 680,000 Accounts 835,000 313,000 Buildings and equipment Franchise agreements Goodwill Revenues Additional paid-in capital Expenses Retained earnings, 1/1 Retained earnings, 12/31 (319,000) (127,000) (957,500) (660,000) 0 (70,000) (437,500) (1,015,000) 962,000 Sol Company Amounts Book Values 12/31 $ 54,400 353,000 286,000 163,000 294,000 229,000 (147,000) (30,000) (597,500) 0 (210,000) (90,000) (284,000) (399,900) 379,000 Note: Parentheses indicate a credit balance. On December 31, Padre acquires…
The Global Products Corporation has three subsidiaries. Sales Net income (after taxes) Assets Medical Supplies Heavy Machinery Electronics a-1. What is the return on sales for each subsidiary? Note: Input your answers as a percent rounded to 2 decimal places. O Medical Supplies O Electronics Medical Supplies Heavy Machinery $ 20,590,000 $5,140,000 1,830,000 19,900,000 a-2. Which subsidiary has the lowest return on sales? Heavy Machinery Return on Sales % % % Medical Supplies Heavy Machinery Electronics 697,000 8,450,000 b-1. What is the return on assets for each subsidiary? Note: Input your answers as a percent rounded to 2 decimal places. Return on Assets % % % Electronics $ 4,190,000 364,000 3,860,000
Following are preacquisition financial balances for Padre Company and Sol Company as of December 31. Also included are fair values for Sol Company accounts. Cash Padre Company Book Values 12/31 $ 193,250 Sol Company Book Values 12/31 $ 72,900 Fair Values 12/31 $ 72,900 Items Receivables 228,000 369,000 369,000 Inventory 602,500 190,000 242,200 Land 765,000 195,000 166,200 Building and equipment (net) 765,000 271,000 340,000 Franchise agreements 224,000 216,000 249,900 Accounts payable (350,000) (138,000) (138,000) Accrued expenses (119,000) (47,500) (47,500) Long-term liabilities Common stock-$5 par value Additional paid-in capital Retained earnings, 1/1 Revenues (995,000) (552,500) (552,500) Common stock-$20 par value (660,000) 0 0 0 (210,000) (70,000) (90,000) 0 0 Expenses (522,500) (1,041,250) 980,000 (251,000) 0 (352,900) 0 328,000 0 Note: Parentheses indicate a credit balance. On December 31, Padre acquires Sol's outstanding stock by paying $108,000 in cash and issuing 17,000…
On January 1, 20X1, Popular Creek Corporation organized SunTime Company as a subsidiary in Switzerland with an initial investment cost of Swiss francs (SFr) 76,000. SunTime's December 31, 20X1, trial balance in SFr is as follows: Credit Cash Accounts Receivable (net) Receivable from Popular Creek Inventory Plant and Equipment Accumulated Depreciation Accounts Payable Bonds Payable Common Stock Sales Cost of Goods Sold Depreciation Expense Operating Expense Dividends Paid Total January 1 March 11 SFr 1 $ 0.73 SFr 1$ 0.74 SFr. 1 = $0.77 SFr 1- $ 0.80 SFr 1 = $0.75 Debit SFr 8,100 21,000 6,200 27,500 107,000 72,500 11,600 31,500 15,800 SFr 301,200 Additional Information 1. The receivable from Popular Creek is denominated in Swiss francs. Popular Creek's books show a $5,200 payable to SunTime. 2. Purchases of inventory goods are made evenly during the year. Items in the ending inventory were purchased November 1. 3. Equipment is depreciated by the straight-line method with a 10-year life…
Following are preacquisition financial balances for Padre Company and Sol Company as of December 31. Also included are fair values for Sol Company accounts. Cash Receivables Inventory Land Building and equipment (net) Franchise agreements Accounts payable Accrued expenses Longterm liabilities Common stock-$20 par value Common stock-$5 par value Additional paid-in capital Retained earnings, 1/1 Revenues Expenses Inventory Land Accounts Buildings and equipment Franchise agreements Goodwill Revenues Additional paid-in capital $ Expenses Retained earnings, 1/1 Retained earnings, 12/31 Padre Company Amounts Sol Company Book Values Book Values Fair Values 12/31 12/31 84, 100 392,000 249,000 200,000 237,000 Note: Parentheses indicate a credit balance. On December 31, Padre acquires Sol's outstanding stock by paying $349,000 in cash and issuing 11,400 shares of its own common stock with a fair value of $40 per share. Padre paid legal and accounting fees of $23,400 as well as $12,800 in stock…
Fact Pattern: Scroll, Inc., a wholly owned subsidiary of Pirn, Inc., began operations on January 1, Year 4. The following information is from the condensed Year 4 income statements: Pirn Scroll Sales to Scroll $100,000 $ -- Sales to others 400,000 300,000 $500,000 $300,000 Cost of goods sold: Acquired from Pirn -- 80,000 Acquired from others 350,000 190,000 Gross profit $150,000 $ 30,000 Depreciation 40,000 10,000 Other expenses 60,000 15,000 Income from operations $ 50,000 $ 5,000 Gain on sale of equipment to Scroll 12,000 -- Income before income taxes $ 62,000 $ 5,000 Additional Information Sales by Pirn to Scroll are made on the same terms as those made to third parties. Equipment purchased by Scroll from Pirn for $36,000 on January 1, Year 4, is depreciated using the straight-line method over 4…
Following are preacquisition financial balances for Padre Company and Sol Company as of December 31. Also included are fair values for Sol Company accounts. Cash Receivables Inventory Land Building and equipment (net) Franchise agreements Accounts payable Accrued expenses Longterm liabilities Common stock-$20 par value Common stock-$5 par value Additional paid-in capital Retained earnings, 1/1 Revenues Expenses Inventory Land Accounts Buildings and equipment Franchise agreements Goodwill $ Revenues Additional paid-in capital Expenses Retained earnings, 1/1 Retained earnings, 12/31 Padre Company Book Values 12/31 Amounts Sol Company Book Values 12/31 Fair Values 12/31 59,400 381,000 349, 100 142,900 387,500 268,800 (149,000) (40,000) (1,132,500) (660,000) (660,000) (660,000) 317,000 240,000 381,000 520,000 296,000 762,500 170,000 672,500 321,000 Note: Parentheses indicate a credit balance. On December 31, Padre acquires Sol's outstanding stock by paying $219,000 in cash and issuing…
None
3
Dhapa
A-6