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10 points Hardy Company is a wholly owned subsidiary of Stephine Corporation, a US based Co. on January 1, 2021. Handy operates in a foreign
10 points Hardy Company is a wholly owned subsidiary of Stephine Corporation, a US based Co. on January 1, 2021. Handy operates in a foreign in Switzerland. Financial statements for the year 2021 are as follows: Sales Hardy Company Consolidated Income and Retained Earnings Cost of goods sold statements For Year Ending December 31, 2021 280,000 (100,000) (20,000) (80,000) Depreciation expense Other expenses Income taxes (30,000) Net income 50,000 Retained earnings 1-1 150,000 200,000 Less: dividends (declared 9-1) Retained Earnings 12/31 (40,000) 160,000 Hardy Company Balance Sheet December 31, 2021 Cash 30,000 Accounts payable 30,000 Accounts receivabl 50,000 Bonds payable 140,000 e Inventory 20,000 Common stock 200,000 Land 100,000 Building net 200,000 Additional paid-in capital Retained eamings 50,000 160,000 Equipment net Total assets 180,000 580,000 Total liabilities and equity 580,000 Additional Information: At the time of the combination, subsidiary's retained earnings were 150,000 (CHF). Hardy uses the FIFO method of inventory valuation and its ending inventory in both 2020 and 2021 was purchased in the last quarter of the year. Beginning and ending inventory are 15,000 and 20,000, respectively. Hardy declared dividends of 40,000 CHF on September 1, 1 2021. Direct exchange rates for Swiss franc are: 10 11 12 13 15 16 2021. Direct exchange rates for Swiss franc are: Date January 1, 2019 January 1, 2021 Exchange Rate $0.8542 1.0451 September 1, 2021 1.1572 December 31,2021 1.1762 Average for 2021 1.1106 Average for last three months of 2021 1.1667 Average for last three months of 2020 1.0223 IXQc Required: A. Translate the year-end balance sheet and income statement of the foreign subsidiary using the temporal method of translation. B. Determine the remeasurement gain or loss to be reported in Stephanie's 2021 consolidated net income. C. Prepare Cost of Goods Schedule For the toolbar, press ALT+F10 (PC) or ALT+FN F10 (Mac). B IV S Paragraph V Arial 10pt T r AL BB B CB E + (1)
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