Livingston Company is a wholly owned subsidiary of Rose Corporation. Livingston

Question

Livingston Company is a wholly owned subsidiary of Rose Corporation. Livingston operates in a foreign country with financial statements recorded in goghs (GH), the company’s functional currency. Financial statements for the year of 2015 are as follows:

The common stock was issued in 2004 when the exchange rate was $2.08 per GH; fixed assets were acquired in 2005 when the rate was $2.00 per GH.

Translate the foreign currency statements into the parent’s reporting currency, the U.S. dollar. Your balance sheet totals might not balance due to rounding of the exchange rates. (Amounts to be deducted and negative amounts should be indicated with a minus sign.)

Required (Show Work):

Prepare the following

Income Statement

Statement of Retained Earnings

Balance Sheet

Livingston Company is a wholly owned subsidiary of Rose Corporation. Livingston operates in a foreign country with financial statements recorded in goghs (GH), the company’s functional currency. Financial statements for the year of 2015 are as follows:

Explanation / Answer

Income Statment:

Statement of Retained Earnings

Balance Sheet:

GH Rate $ Sales 270000 1.59 429300 Less: COGS (155000) 1.59 (246450) Gross Profit 115000 1.59 182850 Less: Operating expenses (54000) 1.59 (85860) Add: Gain on sale of equipment 10000 1.59 15900 Net Income 71000 1.59 112890

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