Kreeger Group is a U.S. retailer with subsidiaries in several countries. One of its subsidiaries, Organic Unlimited,
Question:
Kreeger Group is a U.S. retailer with subsidiaries in several countries. One of its subsidiaries, Organic Unlimited, is headquartered in the U.K. but does most of its business in euro markets. The subsidiary was acquired on January 1, 2016. It is now December 31, 2016, and the subsidiary's beginning and ending trial balances, in pounds, are below.
Additional information:
1. Plant assets costing £30,000,000 were acquired on April 5, 2016.
2. Included in operating expenses is £12,000,000 in depreciation on plant assets. Of that amount, £2,000,000 is depreciation on the plant assets acquired in 2016.
3. Sales revenue, purchases, and out of pocket operating expenses were incurred evenly during the year.
4. Organic uses FIFO to report its inventory. The ending inventory was purchased on December 15, 2016.
Exchange rates were as follows:
Required
Convert Organic’s December 31, 2016, trial balance to U.S. dollars in preparation for consolidation with its U.S. parent. Note that Organic’s local currency is the pound, its functional currency is the euro, and its reporting currency is the U.S. dollar.
Step by Step Answer: