On January 1, 2014, Trenten Systems, a U.S.-based company, purchased a controlli
ID: 2403939 • Letter: O
Question
On January 1, 2014, Trenten Systems, a U.S.-based company, purchased a controlling interest in Grant Management Consultants located in Zurich, Switzerland.
Collapse question part
Translate the year-end balance sheet and income statement of the foreign subsidiary using the current rate method of translation. (Round answers to 0 decimal places,
Exercise 13-4On January 1, 2014, Trenten Systems, a U.S.-based company, purchased a controlling interest in Grant Management Consultants located in Zurich, Switzerland.
The acquisition was treated as a purchase transaction. The 2014 financial statements stated in Swiss francs are given below. GRANT MANAGEMENT CONSULTANTS Comparative Balance Sheets January 1 and December 31, 2014 Jan. 1 Dec. 31 Cash and Receivables 19,600 55,700 Net Property, Plant, and Equipment 39,600 36,800 Totals 59,200 92,500 Accounts and Notes Payable 30,100 32,200 Common Stock 19,700 19,700 Retained Earnings 9,400 40,600 Totals 59,200 92,500 GRANT MANAGEMENT CONSULTANTS Consolidated Income and Retained Earnings Statement for the Year Ended December 31, 2014 Revenues 76,500 Operating Expenses including Depreciation of 2,800 francs 30,000 Net Income 46,500 Dividends Declared and Paid 15,300 Increase in Retained Earnings 31,200 Direct exchange rates for Swiss franc are: Dollars per Franc 1-Jan-14 $0.60 ######## 0.5321 Average for 2014 0.5654 Dividend declaration and payment date 0.581Collapse question part
(a)Translate the year-end balance sheet and income statement of the foreign subsidiary using the current rate method of translation. (Round answers to 0 decimal places,
Explanation / Answer
On January 1, 2014, Trenten Systems, a U.S.-based company, purchased a controlling interest in Grant Management Consultants located in Zurich, Switzerland.
Exercise 13-4On January 1, 2014, Trenten Systems, a U.S.-based company, purchased a controlling interest in Grant Management Consultants located in Zurich, Switzerland.
The acquisition was treated as a purchase transaction. The 2014 financial statements stated in Swiss francs are given below. GRANT MANAGEMENT CONSULTANTS Comparative Balance Sheets January 1 and December 31, 2014 Jan. 1 Dec. 31 Cash and Receivables 19,600 55,700 Net Property, Plant, and Equipment 39,600 36,800 Totals 59,200 92,500 Accounts and Notes Payable 30,100 32,200 Common Stock 19,700 19,700 Retained Earnings 9,400 40,600 Totals 59,200 92,500 GRANT MANAGEMENT CONSULTANTS Consolidated Income and Retained Earnings Statement for the Year Ended December 31, 2014 Revenues 76,500 Operating Expenses including Depreciation of 2,800 francs 30,000 Net Income 46,500 Dividends Declared and Paid 15,300 Increase in Retained Earnings 31,200Related Questions
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