On January 1, 20X1, Popular Creek Corporation organized RoadTime Company as a subsidiary in Switzerland with an initial investment cost of Swiss francs (SFr) 60,000. RoadTime痴 December 31, 20X1, trial balance in SFr is as follows:
Cash SFr 7,000
Accounts Receivable (net) 20,000
Receivable from Popular Creek 5,000
Plant and Equipment 100,000
Accumulated Depreciation SFr 10,000
Accounts Payable 12,000
Bonds Payable 50,000
Common Stock 60,000
Cost of Goods Sold 70,000
Depreciation Expense 10,000
Operating Expense 30,000
Dividends Paid 15,000
Total 282,000 282,000
1. The receivable from Popular Creek is denominated in Swiss francs. Popular Creek痴 books show a $4,000 payable to RoadTime.
2. Purchases of inventory goods are made evenly during the year. Items in the ending inventory were purchased November 1.
3. Equipment is depreciated by the straight-line method with a 10-year life and no residual value. A full year痴 depreciation is taken in the year of acquisition. The equipment was acquired on March 1.
4. The dividends were declared and paid on November 1.
5. Exchange rates were as follows:
January 1 SFr1 = 0.73
March 1 SFr1 = 0.74
November 1 SFr1 = 0.77
December 31 SFr1 = 0.80
20X1 Average SFr1 = 0.75
6. The Swiss franc is the functional currency.
Prepare a schedule translating the December 31, 20X1, trial balance from Swiss francs to dollars.
This question was asked on May 17, 2010.
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