Abercrombie Co., a U.S. firm, formed a German company in 2018 by purchasing the common stock...
Homework Answers
| Year | Description | Amount | Exchange Rate | Translated Amount |
| 2018 | Net loss | - 1,000,000.00 | 0.215 | - 215,000.00 |
| 2019 | Net Income | 2,000,000.00 | 0.240 | 480,000.00 |
| 2020 | Dividend | - 500,000.00 | 0.245 | - 122,500.00 |
| 2020 | Net Income | 750,000.00 | 0.250 | 187,500.00 |
| Translated December 31, 2020, balance of the retained earnings for Dolce | 330,000.00 |
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Abercrombie Co., a U.S. firm, formed a German company in 2018
by purchasing the common stock...
a. Abercrombie Co., a U.S. firm, formed a German company in 2018 by purchasing the common...
a. Abercrombie Co., a U.S. firm, formed a German company in 2018 by purchasing the common stock of the newly formed Dolce Inc. The functional currency of Dolce is the euro. During their first three years, dolce experienced the following activity in retained earnings: 2018 Net loss 1,000,000 euros 2019 Net income 2,000,000 euros January 1, 2020 Dividend 500,000 euros 2020 Net income 750,000 euros The following exchange rates could be relevant:...
Translation of financial statements A U.S.-based MNC has a subsidiary in France (local currency, euro, €)....
Translation of financial statements A U.S.-based MNC has a subsidiary in France (local currency, euro, €). The balance sheet and income statement of the subsidiary follow: : On December 31, 2019, the exchange rate is US$1.17/€. Assume that the local (euro) figures for the statements remain the same on December 31, 2020. Calculate the U.S. dollar-translated figures for the two ending time periods, assuming that between December 31, 2019 and December 31, 2020, the euro has appreciated against the U.S....
On January 1, 2008, T Systems, a U.S.-based company, purchased a controlling interest in G Company...
On January 1, 2008, T Systems, a U.S.-based company, purchased a controlling interest in G Company located in Paris, France Direct exchange rates for Euros are: Dollars per Euro January 1, 2008 $.92 December 31, 2008 .87 Average for 2008 .76 Dividend declaration and payment date .80 Required: Translate the year-end balance sheet and income statement of the foreign subsidiary using the current rate method of translation. Euros Translation Income Statement Rate U.S. Dollars Revenue 75,000 Operating expenses (30,000) Net...
On January 1, 2018, an investor company acquired 30% of an investee company’s common stock for...
On January 1, 2018, an investor company acquired 30% of an investee company’s common stock for $600,000. As a result of this transaction, the investor can exert significant influence over the investee. During each year ended December 31, 2018 and 2019 the investee reported $120,000 of net income and $50,000 of dividends. On January 1, 2018, the book value of the investee’s net assets was $2,000,000 and all individual net assets had appraised fair values that equaled their reported book...
On January 1, 2018, Pen Corporation acquired 75% of the outstanding common stock of Sen Company...
On January 1, 2018, Pen Corporation acquired 75% of the outstanding common stock of Sen Company for $450,000. Fair value of noncontrolling interest at the date of acquisition is $116,500. Sen’s stockholders’ equity on January 1, 2018, was as follows: Common stock, $20 par $200,000 Additional paid-in capital 100,000 Retained earnings 100,000 Accumulated OCI 25,000 Differences between book value and fair value of the identifiable net assets of Sen Company on January 1, 2018, were...
Haynes, Inc. obtained 100% of Turner Company's common stock on January 1, 2018, by issuing 50,000...
Haynes, Inc. obtained 100% of Turner Company's common stock on January 1, 2018, by issuing 50,000 shares of common stock that was trading at $35 per share. The acquisition agreement also contained a contingent consideration clause to which Haynes assigned a fair value of $100,000. On January 1, 2018, Turner reported a net book value of $1,500,000. However, Equipment (5-year life) was undervalued by $150,000. Also, Turner had research and development in process with an assessed value of $100,000, although...
Comprehensive Dakota Corporation had the following shareholders' equity account balances at December 31, 2018: Preferred stock...
Comprehensive Dakota Corporation had the following shareholders' equity account balances at December 31, 2018: Preferred stock $1,800,000 Additional paid-in capital on preferred stock 90,000 Common stock 5,150,000 Additional paid-in capital on common stock 3,500,000 Retained earnings 4,000,000 Unrealized decrease in value of marketable equity securities 245,000 Treasury common stock 270,000 Transactions during 2019 and other information relating to the shareholders' equity accounts were as follows: 1. Dakota's preferred and common shares are traded on the over-the-counter market. At December 31,...
1) The balance of common stock of S Co. at acquisition date was: * a) $1,625,000...
1) The balance of common stock of S Co. at acquisition
date was: *
a) $1,625,000
b) $1,850,000
c) $2,000,000
d) $1,960,000
2) The eliminating entries for a consolidated statements workpaper
on December 31, 2019, will include: *
a) Debit Investment in S Co. $2,080,000
b) Credit Retained Earnings $600,000
c) Credit Dividends Declared $160,000
d) Debit Dividend Income $128,000
3) The difference between implied and book value at acquisition
date was: *
a) $120,000
b) $175,000
c) $125,000
d)...
XYZ company has the following: –Stock market price, December 31, 2018: $80 –Common stock ($5 par):...
XYZ company has the following: –Stock market price, December 31, 2018: $80 –Common stock ($5 par): $3,000,000 –Net Income for year 2018: $1,700,000 –Retained Earnings January 1, 2018: $1,900,000 If on December 31, 2018, the company wants to pay the maximum amount it can in dividends to its shareholders, what is the dividend yield ratio? Select one: a. 7.5% b. 4% c. 3.5% d. 6%
On January 1, 2018, Strait Corp. purchased 100% of the outstanding common stock of Amarillo Company....
On January 1, 2018, Strait Corp. purchased 100% of the outstanding common stock of Amarillo Company. On the date of the acquisition, Amarillo’ identifiable net assets had fair values that approximated their recorded book values. The acquisition resulted in no goodwill. Strait Corp. uses the cost method to account for its investment in Amarillo Company. The following financial statement information is for Amarillo Company for the year ended December 31, 2019: 2019 2018 Revenues $100,000 $120,000 Expenses 47,000 65,000 Net...
Translation of financial statements A U.S.-based MNC has a subsidiary in France (local currency, euro, €). The balance sheet and income statement of the subsidiary follow: : On December 31, 2019, the exchange rate is US$1.17/€. Assume that the local (euro) figures for the statements remain the same on December 31, 2020. Calculate the U.S. dollar-translated figures for the two ending time periods, assuming that between December 31, 2019 and December 31, 2020, the euro has appreciated against the U.S....
Haynes, Inc. obtained 100% of Turner Company's common stock on January 1, 2018, by issuing 50,000 shares of common stock that was trading at $35 per share. The acquisition agreement also contained a contingent consideration clause to which Haynes assigned a fair value of $100,000. On January 1, 2018, Turner reported a net book value of $1,500,000. However, Equipment (5-year life) was undervalued by $150,000. Also, Turner had research and development in process with an assessed value of $100,000, although...
Comprehensive Dakota Corporation had the following shareholders' equity account balances at December 31, 2018: Preferred stock $1,800,000 Additional paid-in capital on preferred stock 90,000 Common stock 5,150,000 Additional paid-in capital on common stock 3,500,000 Retained earnings 4,000,000 Unrealized decrease in value of marketable equity securities 245,000 Treasury common stock 270,000 Transactions during 2019 and other information relating to the shareholders' equity accounts were as follows: 1. Dakota's preferred and common shares are traded on the over-the-counter market. At December 31,...
1) The balance of common stock of S Co. at acquisition
date was: *
a) $1,625,000
b) $1,850,000
c) $2,000,000
d) $1,960,000
2) The eliminating entries for a consolidated statements workpaper
on December 31, 2019, will include: *
a) Debit Investment in S Co. $2,080,000
b) Credit Retained Earnings $600,000
c) Credit Dividends Declared $160,000
d) Debit Dividend Income $128,000
3) The difference between implied and book value at acquisition
date was: *
a) $120,000
b) $175,000
c) $125,000
d)...
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