In January, 20X3, Dudwil Corporation acquired a foreign subsidiary, Holman Company, by paying cash for all of the outstanding common stock of Holman On the purchase date, Holman Company's accounts were stated fairly in local currency units (FC) Subsequent sales of Holman's common stock have been purchased by Dudwil to maintain its 100 ownership Holman's trial balance, in functional currency units (same as the local currency units), on December 31, 20X7, follows Debit Credit Cash 58,400 Marketable securities 32,500 Accounts receivable (net) 51,370 Inventories 108,000 Surrender value of life insurance 7,200 Intangible assets 123,900 Property, plant, and equipment 636,000 Accumulated depreciation 93,850 Accounts payable 74,000 Accrued interest payable 7,120 Notes payable 52,000 Bonds payable 80,000 Capital stock 83,000 Paid in capital in excess of par 190,300 Retained earnings 390,400 Sales 936,300 Cost of goods sold 762,000 Interest expense 7,120 Depreciation expense 39,350 Amortization expense intangibles 3,100 Other expenses 84,230 Gain on sale of equipment 2,400 Interest income 3,800 Total 1,913,170 1,913,170 The following additional information is available a Holman uses the LIFO inventory method to account for its inventory Purchases took place uniformly throughout 20X7 There were no intercompany sales during 20X7 b During 20X7, Holman declared and paid a dividend of 7,000 FCs at the end of each calendar quarter c The balances in the contributed capital accounts result from the following transactions Paid in Capital Date Capital Stock in Excess of Par January 1, 20X3, issuance 40,000 FC 80,000 FC June 30, 20X5, issuance 40,000 104,300 January 1, 20X6, issuance 10,000 20,000 August 1, 20X6, retirement (7,000) (14,000) 83,000 FC 190,300 FC The August 1, 20X6, retirement of stock involves stock originally issued on January 1, 20X3 d The December 31, 20X6, retained earnings balance of 418,400 FC, translated into dollars, is $179,460 e Selected translation rates are as follows Date 1 FC equal to January 1, 20X3 $0 30 20X3 average 0 32 20X4 average 0 38 February 1, 20X5 0 42 June 30, 20X5 0 45 20X5 average 0 45 January 1, 20X6 0 50 February 1, 20X6 0 52 August 1, 20X6 0 60 December 31, 20X6 0 61 20X6 average 0 56 March 31, 20X7 0 63 June 30, 20X7 0 66 September 30, 20X7 0 70 December 31, 20X7 0 75 20X7 average 0 70 Required Prepare a schedule to translate the December 31, 20X7, trial balance of Holman Company from local currency units to dollars The schedule should show the trial balance in FCs, the exchange rates, and the trial balance (Do not extend the trial balance to statement columns In January, 20X3, Dudwil Corporation acquired a foreign subsidiary, Holman Company, by paying cash for all of the outstanding common stock of Holman On the purchase date, Holman Company's accounts were stated fairly in local currency units (FC) Subsequent sales of Holman's common stock have been purchased by Dudwil to maintain its 100 ownership Holman's trial balance, in functional currency units (same as the local currency units), on December 31, 20X7, follows Debit Credit Cash 58,400 Marketable securities 32,500 Accounts receivable (net) 51,370 Inventories 108,000 Surrender value of life insurance 7,200

Original Amounts Converted Amounts Debit Credit Exchange Rate Debit Credit Cash 58400 075 43800 0 Ma...

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In January, 20X3, Dudwil Corporation acquired a foreign subsidiary, Holman Company, by paying cash for all of the outstanding common stock of Holman. On the

In January, 20X3, Dudwil Corporation acquired a foreign subsidiary, Holman Company, by paying cash for all of the outstanding common stock of Holman. On the purchase date, Holman Company's accounts were stated fairly in local currency units (FC). Subsequent sales of Holman's common stock have been purchased by Dudwil to maintain its 100% ownership.

Holman's trial balance, in functional currency units (same as the local currency units), on December 31, 20X7, follows:

	Debit	Credit
Cash	58,400
Marketable securities	32,500
Accounts receivable (net)	51,370
Inventories	108,000
Surrender value of life insurance	7,200
Intangible assets	123,900
Property, plant, and equipment	636,000
Accumulated depreciation		93,850
Accounts payable		74,000
Accrued interest payable		7,120
Notes payable		52,000
Bonds payable		80,000
Capital stock		83,000
Paid-in capital in excess of par		190,300
Retained earnings		390,400
Sales		936,300
Cost of goods sold	762,000
Interest expense	7,120
Depreciation expense	39,350
Amortization expense--intangibles	3,100
Other expenses	84,230
Gain on sale of equipment		2,400
Interest income		3,800
Total	1,913,170	1,913,170

The following additional information is available:

a.		Holman uses the LIFO inventory method to account for its inventory. Purchases took place uniformly throughout 20X7. There were no intercompany sales during 20X7.

b.		During 20X7, Holman declared and paid a dividend of 7,000 FCs at the end of each calendar quarter.

c.		The balances in the contributed capital accounts result from the following transactions:

						Paid-in Capital
			Date	Capital Stock		in Excess of Par
			January 1, 20X3, issuance	40,000	FC	80,000		FC
			June 30, 20X5, issuance	40,000		104,300
			January 1, 20X6, issuance	10,000		20,000
			August 1, 20X6, retirement	(7,000)		(14,000)
				83,000	FC	190,300		FC

		The August 1, 20X6, retirement of stock involves stock originally issued on January 1, 20X3.

d.		The December 31, 20X6, retained earnings balance of 418,400 FC, translated into dollars, is $179,460.

	e.		Selected translation rates are as follows:
			Date				1 FC equal to
			January 1, 20X3				$0.30
			20X3 average				0.32
			20X4 average				0.38
			February 1, 20X5				0.42
			June 30, 20X5				0.45
			20X5 average				0.45
			January 1, 20X6				0.50
			February 1, 20X6				0.52
			August 1, 20X6				0.60
			December 31, 20X6				0.61
			20X6 average				0.56
			March 31, 20X7				0.63
			June 30, 20X7				0.66
			September 30, 20X7				0.70
			December 31, 20X7				0.75
			20X7 average				0.70

Required :

Prepare a schedule to translate the December 31, 20X7, trial balance of Holman Company from local currency units to dollars. The schedule should show the trial balance in FCs, the exchange rates, and the trial balance. (Do not extend the trial balance to statement columns.

Holman's trial balance, in functional currency units (same as the local currency units), on December 31, 20X7, follows:

	Debit	Credit
Cash	58,400
Marketable securities	32,500
Accounts receivable (net)	51,370
Inventories	108,000
Surrender value of life insurance	7,200	Step by Step Solution ★★★★★ 3.45 Rating (164 Votes ) There are 3 Steps involved in it Step: 1 Original Amounts Converted Amounts Debit Credit Exchange Rate Debit Credit Cash 58400 075 43800 0 Ma... Get Instant Access to Expert-Tailored Solutions See step-by-step solutions with expert insights and AI powered tools for academic success Step: 2 Step: 3 Ace Your Homework with AI Get the answers you need in no time with our AI-driven, step-by-step assistance Get Started Recommended Textbook for Advanced Accounting Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupni 13th edition 1259444953, 978-1259444951 More Books Students also viewed these Accounting questions Question Company P acquired 80% of the outstanding common stock of Company S on 1 January 2014. The acquisition price included a $40,000 control premium. On the date of acquisition, an equipment was... 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