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Sullivan's Island Company began operating a subsidiary in a foreign country on January 1, 2024, by investing capital in the amount of 84,000 pounds. The subsidiary immediately borrowed 200,000 pounds on a five-year note with 10 percent interest payable annually beginning on January 1, 2025. The subsidiary then purchased for 284,000 pounds a building that had a 10-year expected life and no salvage value and is to be depreciated using the straight-line method. Also on January 1, 2024, the subsidiary rented the building for three years to a group of local attorneys for 8,600 pounds per month. By year-end, rent payments totaling 86,000 pounds had been received, and 17,200 pounds was in accounts receivable. On October 1, 2024, 3,600 pounds was paid for a repair made to the building. The subsidiary transferred a cash dividend of 11,700 pounds back to Sullivan's Island Company on December 31, 2024. The functional currency for the subsidiary is the pound. Currency exchange rates for 1 pound follow: January 1, 2024 October 1, 2024 December 31, 2024 Average for 2024 Required: $ 2.101 Pound 2.15 = 1 Pound 2.18 = 1 Pound 2.14 = 1 Pound Prepare an income statement, statement of retained earnings, and balance sheet for this subsidiary in pounds and then translate these amounts into U.S. dollars. Complete this question by entering your answers in the tabs below. Income Statement Retained Earnings Balance Sheet Prepare a Statement of Retained earnings. Note: Amounts to be deducted should be indicated by a minus sign. SULLIVAN'S ISLAND COMPANY Statement of Retained Earnings For the Year Ended December 31, 2024 Retained earnings, 1/1 Pounds U.S. Dollars Retained earnings, 12/31 0 $ 0

Sullivan's Island Company began operating a subsidiary in a foreign country on January 1, 2024, by investing capital in the amount of 84,000 pounds. The subsidiary immediately borrowed 200,000 pounds on a five-year note with 10 percent interest payable annually beginning on January 1, 2025. The subsidiary then purchased for 284,000 pounds a building that had a 10-year expected life and no salvage value and is to be depreciated using the straight-line method. Also on January 1, 2024, the subsidiary rented the building for three years to a group of local attorneys for 8,600 pounds per month. By year-end, rent payments totaling 86,000 pounds had been received, and 17,200 pounds was in accounts receivable. On October 1, 2024, 3,600 pounds was paid for a repair made to the building. The subsidiary transferred a cash dividend of 11,700 pounds back to Sullivan's Island Company on December 31, 2024. The functional currency for the subsidiary is the pound. Currency exchange rates for 1 pound follow: January 1, 2024 October 1, 2024 December 31, 2024 Average for 2024 Required: $ 2.101 Pound 2.15 = 1 Pound 2.18 = 1 Pound 2.14 = 1 Pound Prepare an income statement, statement of retained earnings, and balance sheet for this subsidiary in pounds and then translate these amounts into U.S. dollars. Complete this question by entering your answers in the tabs below. Income Statement Retained Earnings Balance Sheet Prepare a Statement of Retained earnings. Note: Amounts to be deducted should be indicated by a minus sign. SULLIVAN'S ISLAND COMPANY Statement of Retained Earnings For the Year Ended December 31, 2024 Retained earnings, 1/1 Pounds U.S. Dollars Retained earnings, 12/31 0 $ 0

FINANCIAL ACCOUNTING
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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Sullivan's Island Company began operating a subsidiary in a foreign country on January 1, 2024, by investing capital in the amount of 84,000 pounds. The subsidiary immediately borrowed 200,000 pounds on a five-year note with 10 percent interest payable annually beginning on January 1, 2025. The subsidiary then purchased for 284,000 pounds a building that had a 10-year expected life and no salvage value and is to be depreciated using the straight-line method. Also on January 1, 2024, the subsidiary rented the building for three years to a group of local attorneys for 8,600 pounds per month. By year-end, rent payments totaling 86,000 pounds had been received, and 17,200 pounds was in accounts receivable. On October 1, 2024, 3,600 pounds was paid for a repair made to the building. The subsidiary transferred a cash dividend of 11,700 pounds back to Sullivan's Island Company on December 31, 2024. The functional currency for the subsidiary is the pound. Currency exchange rates for 1 pound follow: January 1, 2024 October 1, 2024 December 31, 2024 Average for 2024 Required: $ 2.101 Pound 2.15 = 1 Pound 2.18 = 1 Pound 2.14 = 1 Pound Prepare an income statement, statement of retained earnings, and balance sheet for this subsidiary in pounds and then translate these amounts into U.S. dollars. Complete this question by entering your answers in the tabs below. Income Statement Retained Earnings Balance Sheet Prepare a Statement of Retained earnings. Note: Amounts to be deducted should be indicated by a minus sign. SULLIVAN'S ISLAND COMPANY Statement of Retained Earnings For the Year Ended December 31, 2024 Retained earnings, 1/1 Pounds U.S. Dollars Retained earnings, 12/31 0 $ 0
Transcribed Image Text:Sullivan's Island Company began operating a subsidiary in a foreign country on January 1, 2024, by investing capital in the amount of 84,000 pounds. The subsidiary immediately borrowed 200,000 pounds on a five-year note with 10 percent interest payable annually beginning on January 1, 2025. The subsidiary then purchased for 284,000 pounds a building that had a 10-year expected life and no salvage value and is to be depreciated using the straight-line method. Also on January 1, 2024, the subsidiary rented the building for three years to a group of local attorneys for 8,600 pounds per month. By year-end, rent payments totaling 86,000 pounds had been received, and 17,200 pounds was in accounts receivable. On October 1, 2024, 3,600 pounds was paid for a repair made to the building. The subsidiary transferred a cash dividend of 11,700 pounds back to Sullivan's Island Company on December 31, 2024. The functional currency for the subsidiary is the pound. Currency exchange rates for 1 pound follow: January 1, 2024 October 1, 2024 December 31, 2024 Average for 2024 Required: $ 2.101 Pound 2.15 = 1 Pound 2.18 = 1 Pound 2.14 = 1 Pound Prepare an income statement, statement of retained earnings, and balance sheet for this subsidiary in pounds and then translate these amounts into U.S. dollars. Complete this question by entering your answers in the tabs below. Income Statement Retained Earnings Balance Sheet Prepare a Statement of Retained earnings. Note: Amounts to be deducted should be indicated by a minus sign. SULLIVAN'S ISLAND COMPANY Statement of Retained Earnings For the Year Ended December 31, 2024 Retained earnings, 1/1 Pounds U.S. Dollars Retained earnings, 12/31 0 $ 0
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