Question

Hamburger inc owns pasta inc a subsidiary in Italy which was established January 1, 2010. Pastas...

Hamburger inc owns pasta inc a subsidiary in Italy which was established January 1, 2010.
Pastas balance sheet as of 12/31/10 in euros.
Cash. 1,500
Accounts rec 1,600
Inventory 2,400
Fixed assets 9,000
Accumulated depreciation 1,000

Accounts payable 3,000
Long term debt 6,000
Capital stock. 3,000
Retained earnings 1,500

Pastas income statement items for 2010 in euros
Sales 20,000
Cogs 14,000
SG&aexpenses 2,500
Depreciation expense 1,000
Interest expense 500
Income tax expense 500

There was no beginning inventory. Inventory is carried at cost was acquired evenly during the last quarter of 2010
Purchases were made evenly throughout the yeAr.
Fixed assets were acquired on January 1 2010
Capital stock was sold on January 1.2010
Exchange rates US dollar per Euro
January 1,2010. $0.90
Average for 4th quarter 2010 $0.87
Average for 2010 $0.89
December 31,2010 $0.82

Show the income statement and balance sheet using the temporal method
Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

using the temporal method:

Balance Sheet as of 12/31/10
Assets: Euro Exch. Rate Dollar
Cash 1500 0.89 1335
AR 1600 0.89 1424
Inventory 2400 0.87 2088
FA 9000 0.9 8100
Acc Dep -1000 0.89 -890
Total Assets 13500 12057
Liabilities:
AP 3000 0.87 2610
LT Debt 6000 0.89 5340
Capi Stock 3000 0.9 2700
RE 1500 0.89 1335
add:Exchange gain    72
Total Liabilities 13500 12057
Income Statement for 2010:
Euro Exch. Rate Dollar
Sales 20000 0.89 17800
less COGS 14000 0.89 12460
GP 6000 5340
Less Exp.
SG&Ad. 2500 0.89 2225
Depre 1000 0.89 890
Interest 500 0.89 445
IT exp 500 0.89 445
Total exp 4500 4005
NI 1500 1335
0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Perry Company acquires 100% of the stock of Hurley Corporation on January 1, 2010, for $3,800...
Perry Company acquires 100% of the stock of Hurley Corporation on January 1, 2010, for $3,800 cash. As of that date Hurley has the following trial balance: Debit Credit Cash $500 Accounts Receivable 600 Inventory 800 Buildings (net) (5 year life) 1,500 Equipment (net) (2 year life) 1,000 Land 900 Accounts Payable $400 Long-term liabilities (due 12/31/13) 1,800 Common Stock 1,000 Additional paid-in capital 600 Retained earnings 1,500 Total $5,300 $5,300 Net income and dividends reported by Hurley for 2010...
No. 2: Abbey INC. Balance Sheet Assets Dec. 31, 2010 Jan. 1, 2010 Inc./Dec. Equipment $39,000...
No. 2: Abbey INC. Balance Sheet Assets Dec. 31, 2010 Jan. 1, 2010 Inc./Dec. Equipment $39,000 $22,000 $17,000 Inc. Less: Accumulated depreciation -17,000 $(11,000) 6,000 Inc. Accounts receivable 91000 88,000 3,000 Inc. Cash 45,000 13,000 32,000 Inc. Total $158,000 $112,000 Equity and Liabilities Share capital—ordinary 100000 $80,000 20,000 Inc. Retained earnings 38,000 17,000 21,000 Inc. Accounts payable 20,000 15,000 5,000 Inc. Total $158,000 $112,000 Net Income of $34000 was reported and Dividend of $13000 were paid in 2010. New Equipment...
Lancer, Inc. (a U.S.-based company), establishes a subsidiary in a foreign country on January 1, 2016....
Lancer, Inc. (a U.S.-based company), establishes a subsidiary in a foreign country on January 1, 2016. The following account balances for the year ending December 31, 2017, are stated in kanquo (KQ), the local currency: Sales KQ 180,000 Inventory (bought on 3/1/17) 90,000 Equipment (bought on 1/1/16) 56,000 Rent expense 12,000 Dividends (declared on 10/1/17) 22,000 Notes receivable (to be collected in 2020) 34,000 Accumulated depreciation—equipment 16,800 Salary payable 4,600 Depreciation expense 5,600 The following U.S.$ per KQ exchange rates...
Charles Edward Company established a subsidiary in a foreign country on January 1, 2016, by investing...
Charles Edward Company established a subsidiary in a foreign country on January 1, 2016, by investing FC 3,200,000 when the exchange rate was FC 3.5 to one U.S. dollar. No income was earned and no dividends were paid during that year, nor the next. In 2018, Charles Edward negotiated a bank loan of FC 1,000,000 on January 5, and purchased plant and equipment in the amount of FC 4,800,000 on January 8, 2018. No dividends were paid during 2018. Additional...
Assume that our company owns a subsidiary operating in Germany. The subsidiary has adopted the Euro...
Assume that our company owns a subsidiary operating in Germany. The subsidiary has adopted the Euro (€) as its functional currency. Following are the subsidiary’s financial statements (in €) for the most recent year: Subsidiary (in €) Income statement: Sales 8,000,000 Cost of goods sold (5,100,000) Gross Profit 2,900,000 Operating expenses (1,490,000) Depreciation    (405,000) Remeasurement gain or loss Net income 1,005,000 Statement of retained earnings: BOY retained earnings 4,615,000 Net income 1,005,000 Dividends (118,000) Ending retained earnings 5,502,000 Balance...
On January 1, 20X5, Pirate Company acquired all of the outstanding stock of Ship Inc., a...
On January 1, 20X5, Pirate Company acquired all of the outstanding stock of Ship Inc., a Norwegian company, at a cost of $167,400. Ship’s net assets on the date of acquisition were 720,000 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 Ship’s property, plant, and equipment exceeded its book value by $18,000....
Charles Edward Company established a subsidiary in a foreign country on January 1, 2016, by investing...
Charles Edward Company established a subsidiary in a foreign country on January 1, 2016, by investing FC 3,200,000 when the exchange rate was FC 3.5 to one U.S. dollar. No income was earned and no dividends were paid during that year, nor the next. In 2018, Charles Edward negotiated a bank loan of FC 1,000,000 on January 5, and purchased plant and equipment in the amount of FC 4,800,000 on January 8, 2018. No dividends were paid during 2018. Additional...
Exhibit 1 presents the balance sheet for December 31, 2018 of a Swiss subsidiary, which keeps...
Exhibit 1 presents the balance sheet for December 31, 2018 of a Swiss subsidiary, which keeps its books in Swiss francs. However, they should be translated into U.S. dollars, the reporting currency of the MNC. Exhibit 1: Assets Liabilities & Net Worth Cash             SF2,100,000 Accounts payable SF800,000 Accounts receivable             1,500,000 Notes payable             2,200,000 Inventory             3,000,000 Common stock 2,700,000 Retained earnings             900,000      Total           6,600,000      Total           6,600,000 Assume that the Swiss Franc dropped...
Could you please calculate the NOPAT and ROIC for this problem? Thanks Beginning Year Balance Sheet...
Could you please calculate the NOPAT and ROIC for this problem? Thanks Beginning Year Balance Sheet (000s) Cash & Marketable Securities 500 Accounts Payable 900 Accounts Receivable 1600 Notes Payable 1000 Inventory 1800 Long Term Debt 2000 Property Plant & Equipment 2700 Deferred Taxes 800 Other Long Term Assets 400 Shareholder Equity 2300 Total Assets 7000 Total Claims 7000 Income Statement (000s) Sales 14000 Cost of Goods Sold (9,800) SG & A Expenses (1,000) Depreciation (500) Interest Expense (500) Interest...
On January 1, 2011, Matin Inc. (a wholly-owned subsidiary) sold equipment to Musial Corp. for $168,000...
On January 1, 2011, Matin Inc. (a wholly-owned subsidiary) sold equipment to Musial Corp. for $168,000 in cash. The equipment originally cost $140,000 but had a book value of only $98,000 when transferred. On that date, the equipment had a five-year remaining life. Depreciation expense was calculated using the straight-line method. Musial earned $308,000 in net income in 2011 (including investment income) while Matin reported $126,000. Assume there is no amortization related to the original investment. Musial Corp. sold inventory...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT