1. All entries to record transactions

2. Trial Balance

3. Remeasurement and translation of trial

Problem 11-1 (LO 6, 7) Remeasuring a trial balance and analyzing results. In order to demonstrate the use of the remcasurement process, assume that at the beginning of the ycar a US. parent company invested 100,000 foreign currency B (FCB) to form a 100% owned sub- sidiary. The subsidiary immediately invested the foreign currency in land at a cost of 50,000 FCB and inventory with a cost of 50,000 FCB. At midyear, 50% of the inventory was sold for 40,000 FCB. At year-end, assume that the sale is still uncollected. Although FCB is the subsidi- ary's functional currency, the subsidiary maintains its books of record in foreign currency A (FCA). Assume the following exchange rates Beginning of Year Mid Year End of Year 8 FCA 0.125 FCB 12.5 FCA 10 FCA 0.10 FCB $0.30 $3.00 0.08 FCB $0.20 $0.40 Required . Prepare the entries to record the above transactions: (a) as they would have been recorded on the books of the subsidiary and (b) as they would have been recorded had they been recorded in terms of FCB. Also, prepare the trial balance that would have resulted under each of the recording models 2. Prepare a schedule to remeasure the FCA trial balance into an FCB trial balance and then 3. Prepare a schedule to directly calculate the translation adjustment to be reported in other 4. Compare the remeasured FCB trial balance to the FCB trial balance in part (1) and com- translate into U.S. dollars. comprehensive income. ment regarding whether the objectives of translation have been achieved