Deferred income tax liabilities 12 Accounts payable Answer US dollar is The

Deferred income tax liabilities 12 accounts payable

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11. Deferred income tax liabilities ________ ________ 12. Accounts payable ________ ________
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Answer: U.S. dollar is The foreign the functional currency is the currency functional currency 1. Accounts receivable C C 2. Marketable debt securities carried at cost H C 3. Inventories carried at cost H C 4. Deferred income H C 5. Goodwill H C 6. Other paid-in capital H H 7. Depreciation expense H C 8. Refundable deposits C C 9. Common stock H H 10. Accumulated depreciation on buildings H C 11. Deferred income tax liabilities C C 12. Accounts payable C C Objective: LO2 Difficulty: Moderate
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2) On January 1, 2014, Planet Corporation, a U.S. company, acquired 100% of Star Corporation of Bulgaria, paying an excess of 90,000 Bulgarian lev over the book value of Star's net assets. The excess was allocated to undervalued equipment with a three-year remaining useful life. Star's functional currency is the Bulgarian lev. Star's books are maintained in the functional currency. Exchange rates for Bulgarian lev for 2014 are: January 1, 2014 $.77 Average rate for 2014 .75 December 31, 2014 .73 Required: 1. Determine the depreciation expense stated in U.S. dollars on the excess allocated to equipment for 2014. 2. Determine the unamortized excess allocated to equipment on December 31, 2014 in U.S. dollars. 3. If Star's functional currency was the U.S. dollar, what would be the depreciation expense on the excess allocated to the equipment for 2014? Answer: Objective: LO5 Difficulty: Moderate
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3) Pan Corporation, a U.S. company, formed a British subsidiary on January 1, 2014 by investing 450,000 British pounds (£) in exchange for all of the subsidiary's no-par common stock. The British subsidiary, Skillet Corporation, purchased real property on April 1, 2014 at a cost of £500,000, with £100,000 allocated to land and £400,000 allocated to a building. The building is depreciated over a 40-year estimated useful life on a straight-line basis with no salvage value. The British pound is Skillet's functional currency and its reporting currency. The British economy does not have high rates of inflation. Exchange rates for the pound on various dates were: January 01, 2014 = 1£ = $1.60 April 01, 2014 = 1£ = $1.61 December 31, 2014 = 1£ = $1.68 2014 average rate = 1£ = $1.66 Skillet's adjusted trial balance is presented below for the year ended December 31, 2014. In Pounds Debits: Cash £ 220,000 Accounts receivable 52,000 Inventory 59,000 Building 400,000 Land 100,000 Depreciation expense 7,500 Other expenses 110,000 Cost of goods sold 220,000 Total debits £ 1,168,500 Credits Accumulated depreciation £7,500 Accounts payable 111,000 Common stock 450,000 Retained earnings Equity adjustment Sales revenue 600,000 Total credits £1,168,500 Required: Prepare Skillet's: 1. Translation working papers; 2. Translated income statement; and 3. Translated balance sheet. 0 0
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