On January 1, 20X1, Popular Creek Corporation organized SunTime Company as a subsidiary in Switzerland with an initial investmentcost of Swiss francs (SFr) 76,000. SunTime's December 31, 20X1, trial balance in SFr is as follows:CreditCashAccounts Receivable (net)Receivable from Popular CreekInventoryPlant and EquipmentAccumulated DepreciationAccounts PayableBonds PayableCommon StockSalesCost of Goods SoldDepreciation ExpenseOperating ExpenseDividends PaidTotalJanuary 1March 11SFr 1 $ 0.73SFr 1$ 0.74SFr. 1 = $0.77SFr 1- $ 0.80SFr 1 = $0.75DebitSFr 8,10021,0006,20027,500107,00072,50011,60031,50015,800SFr 301,200Additional Information1. 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 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 11,60012,50052,50076,000148,600Required A Required BSFr 301,200November 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?Complete this question by entering your answers in the tabs below.L

The rate at which one country’s currency can be converted into another country’s currency referred…

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 Additional Information Debit SFr 8,100 21,000 6,200 27,500 107,000 72,500 11,600 31,500 15,800 SFr 301,200 SFr 11,600 12,500 52,500 76,000 148,600 SFr 301,200

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 Additional Information Debit SFr 8,100 21,000 6,200 27,500 107,000 72,500 11,600 31,500 15,800 SFr 301,200 SFr 11,600 12,500 52,500 76,000 148,600 SFr 301,200

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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