Watson Company has a subsidiary in the country of Alonza wherethe local currency unit is the kamel (KM). On December 31, 2014,the subsidiary has the following balance sheet:
Cash KM 15,000 Notes payable (due 2016) KM 28,500 Inventory 23,500 Common stock 30,000 Land 5,000 Retained earnings 15,000 Building 60,000 Accumulateddepreciation (30,000) KM 73,500 KM 73,500
The subsidiary acquired the inventory on August 1, 2014, and theland and buildings in 2000. It issued the common stock in 1998.During 2015, the following transactions took place:
2015 Feb. 1 Paid 16,000 KM onthe note payable. May 1 Sold entireinventory for 31,500 KM on account. June 1 Sold land for 6,100KM cash. Aug. 1 Collected allaccounts receivable. Sept.1 Signed long-termnote to receive 10,500 KM cash. Oct. 1 Bought inventory for15,000 KM cash. Nov. 1 Bought land for5,000 KM on account. Dec. 1 Declared and paid4,000 KM cash dividend to parent. Dec. 31 Recordeddepreciation for the entire year of 3,000 KM.
The exchange rates for 1 KM are as follows:
1998 1 KM = $ 0.26 2000 1 = 0.24 August 1, 2014 1 = 0.34 December 31,2014 1 = 0.36 February 1,2015 1 = 0.38 May 1, 2015 1 = 0.40 June 1, 2015 1 = 0.42 August 1, 2015 1 = 0.44 September 1,2015 1 = 0.46 October 1, 2015 1 = 0.48 November 1,2015 1 = 0.50 December 1,2015 1 = 0.52 December 31,2015 1 = 0.56 Average for2015 1 = 0.46
If this is a translation, what is the translation adjustmentdetermined solely for 2015?
Watson Company has a subsidiary in the country of Alonza wherethe local currency unit is the kamel (KM). On December 31, 2014,the subsidiary has the following balance sheet: |
| Cash | KM | 15,000 | Notes payable (due 2016) | KM | 28,500 |
| Inventory | 23,500 | Common stock | 30,000 | ||
| Land | 5,000 | Retained earnings | 15,000 | ||
| Building | 60,000 | ||||
| Accumulateddepreciation | (30,000) | ||||
| KM | 73,500 | KM | 73,500 | ||
The subsidiary acquired the inventory on August 1, 2014, and theland and buildings in 2000. It issued the common stock in 1998.During 2015, the following transactions took place: |
| 2015 | |
| Feb. 1 | Paid 16,000 KM onthe note payable. |
| May 1 | Sold entireinventory for 31,500 KM on account. |
| June 1 | Sold land for 6,100KM cash. |
| Aug. 1 | Collected allaccounts receivable. |
| Sept.1 | Signed long-termnote to receive 10,500 KM cash. |
| Oct. 1 | Bought inventory for15,000 KM cash. |
| Nov. 1 | Bought land for5,000 KM on account. |
| Dec. 1 | Declared and paid4,000 KM cash dividend to parent. |
| Dec. 31 | Recordeddepreciation for the entire year of 3,000 KM. |
The exchange rates for 1 KM are as follows: |
| 1998 | 1 KM | = | $ | 0.26 |
| 2000 | 1 | = | 0.24 | |
| August 1, 2014 | 1 | = | 0.34 | |
| December 31,2014 | 1 | = | 0.36 | |
| February 1,2015 | 1 | = | 0.38 | |
| May 1, 2015 | 1 | = | 0.40 | |
| June 1, 2015 | 1 | = | 0.42 | |
| August 1, 2015 | 1 | = | 0.44 | |
| September 1,2015 | 1 | = | 0.46 | |
| October 1, 2015 | 1 | = | 0.48 | |
| November 1,2015 | 1 | = | 0.50 | |
| December 1,2015 | 1 | = | 0.52 | |
| December 31,2015 | 1 | = | 0.56 | |
| Average for2015 | 1 | = | 0.46 | |
If this is a translation, what is the translation adjustmentdetermined solely for 2015? |
Related questions
Watson Company has a subsidiary in the country of Alonza wherethe local currency unit is the kamel (KM). On December 31, 2014,the subsidiary has the following balance sheet: |
| Cash | KM | 15,000 | Notes payable (due 2016) | KM | 28,500 |
| Inventory | 23,500 | Common stock | 30,000 | ||
| Land | 5,000 | Retained earnings | 15,000 | ||
| Building | 60,000 | ||||
| Accumulateddepreciation | (30,000) | ||||
| KM | 73,500 | KM | 73,500 | ||
The subsidiary acquired the inventory on August 1, 2014, and theland and buildings in 2000. It issued the common stock in 1998.During 2015, the following transactions took place: |
| 2015 | |
| Feb. 1 | Paid 16,000 KM onthe note payable. |
| May 1 | Sold entireinventory for 31,500 KM on account. |
| June 1 | Sold land for 6,100KM cash. |
| Aug. 1 | Collected allaccounts receivable. |
| Sept.1 | Signed long-termnote to receive 10,500 KM cash. |
| Oct. 1 | Bought inventory for15,000 KM cash. |
| Nov. 1 | Bought land for5,000 KM on account. |
| Dec. 1 | Declared and paid4,000 KM cash dividend to parent. |
| Dec. 31 | Recordeddepreciation for the entire year of 3,000 KM. |
The exchange rates for 1 KM are as follows: |
| 1998 | 1 KM | = | $ | 0.26 |
| 2000 | 1 | = | 0.24 | |
| August 1, 2014 | 1 | = | 0.34 | |
| December 31,2014 | 1 | = | 0.36 | |
| February 1,2015 | 1 | = | 0.38 | |
| May 1, 2015 | 1 | = | 0.40 | |
| June 1, 2015 | 1 | = | 0.42 | |
| August 1, 2015 | 1 | = | 0.44 | |
| September 1,2015 | 1 | = | 0.46 | |
| October 1, 2015 | 1 | = | 0.48 | |
| November 1,2015 | 1 | = | 0.50 | |
| December 1,2015 | 1 | = | 0.52 | |
| December 31,2015 | 1 | = | 0.56 | |
| Average for2015 | 1 | = | 0.46 | |
| a. | If this is a translation, what is the translation adjustmentdetermined solely for 2015?
|
| Chapman Company obtains 100 percent of Abernethy Companyâs stock on January 1, 2014. As of that date, Abernethy has the following trial balance: |
| Debit | Credit | ||||
| Accounts payable | $ | 57,300 | |||
| Accounts receivable | $ | 42,200 | |||
| Additional paid-in capital | 50,000 | ||||
| Buildings (net) (4-year life) | 214,000 | ||||
| Cash and short-term investments | 82,250 | ||||
| Common stock | 250,000 | ||||
| Equipment (net) (5-year life) | 375,000 | ||||
| Inventory | 90,500 | ||||
| Land | 117,000 | ||||
| Long-term liabilities (mature 12/31/17) | 170,000 | ||||
| Retained earnings, 1/1/14 | 409,650 | ||||
| Supplies | 16,000 | ||||
| Totals | $ | 936,950 | $ | 936,950 | |
| During 2014, Abernethy reported net income of $117,500 while declaring and paying dividends of $15,000. During 2015, Abernethy reported net income of $171,250 while declaring and paying dividends of $55,000. |
| Assume that Chapman Company acquired Abernethyâs common stock for $860,500 in cash. As of January 1, 2014, Abernethyâs land had a fair value of $132,000, its buildings were valued at $287,600, and its equipment was appraised at $352,500. Chapman uses the equity method for this investment. |
| Prepare consolidation worksheet entries for December 31, 2014, and December 31, 2015. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) There should be ten entries and I solved the first few:
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On January 1, 2018, the general ledger of ACME Fireworksincludes the following account balances:
| Accounts | Debit | Credit | ||||
| Cash | $ | 25,100 | ||||
| AccountsReceivable | 46,200 | |||||
| Allowance forUncollectible Accounts | $ | 4,200 | ||||
| Inventory | 20,000 | |||||
| Land | 46,000 | |||||
| Equipment | 15,000 | |||||
| AccumulatedDepreciation | 1,500 | |||||
| AccountsPayable | 28,500 | |||||
| Notes Payable (6%,due April 1, 2019) | 50,000 | |||||
| Common Stock | 35,000 | |||||
| RetainedEarnings | 33,100 | |||||
| Totals | $ | 152,300 | $ | 152,300 | ||
During January 2018, the following transactions occur:
January 2. Sold gift cards totaling $8,000. The cards areredeemable for merchandise within one year of the purchasedate.
January 6. Purchase additional inventory on account,$147,000.
January 15. Firework sales for the first half of the month total$135,000. All of these sales are on account. The cost of the unitssold is $73,800.
January 23. Receive $125,400 from customers on accountsreceivable.
January 25. Pay $90,000 to inventory suppliers on accountspayable.
January 28. Write off accounts receivable as uncollectible,$4,800.
January 30. Firework sales for the second half of the month total$143,000. Sales include $11,000 for cash and $132,000 on account.The cost of the units sold is $79,500.
5. Prepare a classified balance sheet as ofJanuary 31, 2018.
6. Record closing entries.
