ACC 440 - Name: Varsha Vasconcelos Instructor: Lisa...

Info iconThis preview shows pages 1–6. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Name: Varsha Vasconcelos Instructor: Lisa Henderson Vikix Inc. Trial Balance Translation December 31, 20X5 Exchange Debits: Kroner Rate U.S. Dollars Cash NKr 150,000 0.21 $31,500 Accounts Receivable (net) 200,000 0.21 42,000 Inventory 270,000 0.21 56,700 Plant and Equipment 600,000 0.21 126,000 Cost of Goods Sold 410,000 0.20 82,000 Operating Expense 100,000 0.20 20,000 Depreciation Expense 50,000 0.20 10,000 Dividends Paid 40,000 0.19 7,600 Total Debits NKr 1,820,000 $375,800 Credits: Accumulated Depreciation NKr 150,000 0.21 $31,500 Accounts Payable 90,000 0.21 18,900 Notes Payable 190,000 0.21 39,900 Common Stock 450,000 0.18 81,000 Retained Earnings 250,000 0.18 45,000 Sales 690,000 0.20 138,000 Accumulated Other Comprehensive Income Translation Adjustment 21,500 Total Credits NKr 1,820,000 $375,800 Requirements for Assignment a. Using the information in the right hand column, complete the schedule above, translating the trial balance from Norwegian Kroner into U.S. Dollars. Assume the Kroner is the functional currency. Only the green cells are active and need to be completed. b. Assume that Taft uses the basic equity method. Record all journal entries that relate to its investment in the Norwegian subsidiary during 20X5. Provide the necessary documentation and support for the amounts in the journal entries, including a schedule of the translation adjustment related to the differential. c. Prepare a schedule that determines Taft's consolidated comprehensive income for 20X5. d. Compute Taft's total consolidated stockholders' equity at December 31, 20X5 ACC 440 Instructions Trial Balance in Kroner (NKr) December 31, 20X5 Debits Credits Cash NKr 150,000 Accounts Receivable (net) 200,000 Inventory 270,000 Property, Plant, and Equipment 600,000 Accumulated Depreciation 150,000 Accounts Payable 90,000 Notes Payable 190,000 Citation from: Baker, R., Lembke, V., King, T. (2009). Advanced Financial Accounting (8th ed.). New York, NY: McGraw-Hill Assignment: Chapter 12, Problem P12-17 - Translation, Journal Entries, Consolidated Comprehensive Income, and Stockholders' Equity On January 1, 20X5, Taft Company acquired all of the outstanding stock of Vikix, Inc., a Norwegian company at a cost of $151,200. Vikix'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 Vikix's property, plant, and equipment exceeded its book value by $18,000. The remaining useful life of Vikix'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. Vikix's trial balance on December 31, 20X5, in Kroner, follows: Common Stock 450,000 Retained Earnings 250,000 Sales 690,000 Cost of Goods Sold 410,000 Operating Expenses 100,000 Depreciation Expense 50,000 Dividends Paid 40,000 Total NKr 1,820,000 1,820,000 Additional Information:...
View Full Document

This note was uploaded on 02/23/2011 for the course ACC 440 taught by Professor Mr.perks during the Spring '11 term at San Jose State University .

Page1 / 43

ACC 440 - Name: Varsha Vasconcelos Instructor: Lisa...

This preview shows document pages 1 - 6. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online