On January 1, 2016, Safetyway Group,a LO1 U.S. company, formed a Swiss subsidiary, TEurope AG. The subsidiary issued all of its currently outstanding common stock on that date. Selected accounts from its balance sheets on December 31, 2016 and 2017, all of which are shown in Swiss francs (CHF), are as follows:

Additional information:
1. Exchange rates are as follows:

2. An analysis of inventories, for which the FIFO inventory method is used, is as follows:

3. On January 1, 2016, TEurope purchased land for CHF24,000 and plant and equipment for CHF140,000. On July 4, 2017, additional equipment was purchased for CHF30,000. Plant and equipment is depreciated on a straight-line basis over a ten-year period with no salvage value. A full year’s depreciation is taken in the year of purchase.

Required

a. Prepare a schedule remeasuring the selected accounts above into U.S. dollars (the functional currency)
at December 31, 2017, and December 31, 2016, respectively. Show supporting computations in good form.

b. Prepare a schedule translating the selected accounts above into U.S. dollars at December 31, 2017, and December 31, 2016, assuming the Swiss frane, is the functional currency.

Transcribed Image Text:

(in millions) Accounts receivable, net... Inventories, at cost.. Property, plant and equipment, net of accumulated depreciation December 31 2017 2016 CHF 40,000 CHF 35,000 80,000 75,000 of CHF31,000 at December 31, 2017 and CHF14,000 at December 31, 2016... 163,000 150,000 Long-term debt 100,000 120,000 Common stock, 10,000 shares authorized, issued and outstanding 5,000 shares at December 31, 2017 and December 31, 2016 ..... 50,000 50,000