Homework SourseOn January 1 2014 Trenten Systems a USbased company purchase
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 13-4 | |||||||||||||||||
| On 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 | 0.581 | ||||||||||||||||
| Collapse 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, |
Solution
On January 1, 2014, Trenten Systems, a U.S.-based company, purchased a controlling interest in Grant Management Consultants located in Zurich, Switzerland.
| Exercise 13-4 | |||||||||||||||||
| On 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 | ||||||||||||||||
