CHAPTER 12 3 PLEASE READ This question has 4 parts please an

CHAPTER 12, 3

PLEASE READ: This question has 4 parts, please answer the FULL question, please TYPE your answer, please LABEL your answer.

On January 1, 20X5, Pirate Company acquired all of the outstanding stock of Ship Inc., a Norwegian company, at a cost of $169,200 Ship\'s net assets on the date of acquisition were 700,000 kroner (NKr). On January 1, 20X5, the book and fair values of the Norwegian subsidiary\'s identifiable assets and liabilities approximated their fair values except for property, plant, and equipment and patents acquired. The fair value of Ship\'s property, plant, and equipment exceeded its book value by $18,000. The remaining useful life of Ship\'s equipment at January 1, 20X5, was 10 years. The remainder of the differential was attributable to a patent having an estimated useful life of 5 years. Ship\'s trial balance on December 31, 20X5, in kroner, follows Debits Credits Cash Accounts Receivable (net) Inventory Property, Plant & Equipment Accumulated Depreciation Accounts Payable Notes Pavable Common Stock Retained Earnings Sales Cost of Goods Sold Operating Expenses Depreciation Expense Dividends Paid Total NKr 163,000 223,000 291,000 603,000 NKr 151,000 92,000 192,000 440,000 260,000 801,000 421,000 121,000 66,000 48,000 NKr1,936,000 NKr1,936,000 Additional Information: 1. Ship uses the FIFO method for its inventory. The beginning inventory was acquired on December 31, 20X4, and ending inventory was acquired on December 15, 20X5. Purchases of NKr420,000 were made evenly throughout 20X5 2. Ship acquired all of its property, plant, and equipment on July 1, 20X3, and uses straight-line depreciation 3. Ship\'s sales were made evenly throughout 20X5, and its operating expenses were incurred evenly throughout 20X5 4. The dividends were declared and paid on July 1, 20X5 5. Pirate\'s income from its own operations was $227,000 for 20X5, and its total stockholders\' equity on January 1, 20X5, was $3,500,000. Pirate declared $120,000 of dividends during 20X5. 6. Exchange rates were as follows

Solution

Cash 34230 accounts receivable 46830 inventory 59655 property, plant and equipment 126630 cost of gods sold 84200 operating expenses 24200 depreciation expenses 13860 dividend paid 9120 Total 398725 Remeasurement loss 0 total debits 398725 accumulated depreciation 31710 accounts payable 19320 notes payable 40320 common stock 79200 retained earnings 46800 sales 160200 Total 377550 Remeasurement profit 21175 Total credits 398725