6 On January 1, 20X1, Kiner Company formed a foreign subsidiary that issued all of its currently outstanding common stock on that date. Selected accounts from the balance sheets, all of which are shown in local currency units, are as follows: December 31 12.5 points 20x2 20x1 eBook LCU 43,000 72,000 LCU 38,000 67,000 Print Accounts Receivable (net of allowance for uncollectible accounts of 1,800 LCU on December 31, 20x2, and 1,600 LCU on December 31, 20x1) Inventories, at cost Property, Plant & Equipment (net of allowance for accumulated depreciation of 39,200 LCU on December 31, 20x2, and 18,000 LCU on December 31, 20x1) Long-Term Debt Common Stock, authorized 28,000 shares, par value 10 LCU per share; issued and outstanding, 14,000 shares on December 31, 20x2, and December 31, 20x1 References 198,800 110,000 188,000 130,000 140,000 140,000 Additional Information: 1. Exchange rates are as follows: January 1, 20X1July 31, 20x1 August 1, 20x1-October 31, 20x1 November 1, 20x1-June 30, 20X2 July 1, 20X2-December 31, 20x2 Average monthly rate for 20x1 Average monthly rate for 20x2 LCU $ 2.0 = 1 1.8 = 1 1.7 - 1 1.5 = 1 1.9 = 1 1.6 - 1 6 2. An analysis of the accounts receivable balance is as follows: 20X2 20X1 LCU 39,600 12.5 points Accounts Receivable: Balance at beginning of year Sales (44,000 LCU per month in 20x2 and 39,000 LCU per month in 20x1) Collections Write-offs (May 20x2 and December 20X1) Balance at end of year 528,000 (519,700) (3,100) LCU 44,800 LCU 468,000 (427,100) (1,300) LCU 39,600 eBook Print References 20X2 20X1 Allowance for Uncollectible Accounts: Balance at beginning of year Provision for uncollectible accounts Write-offs (May 20x2 and December 20x1) Balance at end of year LCU 1,600 3,300 (3,100) LCU 1,800 LCU 2,900 (1,300) LCU 1,600 3. An analysis of inventories, for which the first-in, first-out inventory method is used, follows: 20x1 Inventory at beginning of year Purchases (June 20x2 and June 20x1) Goods available for sale Inventory at end of year Cost of goods sold 20x2 LCU 67,000 320,000 LCU387,000 (72,000) LCU315,000 LCU360,000 LCU360,000 (67,000) LCU293,000 4. On January 1, 20X1, Kiner's foreign subsidiary purchased land for 26,000 LCU and plant and equipment for 180,000 LCU. On July 4, 20X2, additional equipment was purchased for 32,000 LCU. Plant and equipment is being depreciated on a straight-line basis over a 10-year period with no residual value. A full year's depreciation is taken in the year of purchase. 5. On January 15, 20X1, 7 percent bonds with a face value of 130,000 LCU were issued. These bonds mature on January 15, 20X7, and the interest is paid semiannually on July 15 and January 15. The first interest payment was made on July 15, 20X1. Required: Prepare a schedule remeasuring the selected accounts into U.S. dollars for December 31, 20X1, and December 31, 20X2, respectively, assuming the U.S. dollar is the functional currency for the foreign subsidiary. The schedule should be prepared using the following form: (Round your dollar amounts to nearest whole dollar.) KINER COMPANY'S FOREIGN SUBSIDIARY Remeasurement of Selected Captions into United States Dollars December 31, 20X2, and December 31, 20X1 Balance in Indirect Exchange Remeasured into LCUS Rate U.S. Dollars December 31, 20X1: Accounts receivable (net) 38,000 Inventories, at cost 67,000 Property, plant, and equipment (net) 188,000 Long-term debt 130,000 Common stock 140,000 December 31, 20X2: Accounts Receivable (net) 43,000 Inventories, at cost 72,000 Drenarts lant and mainment Intl 100 onn! assuming the U.S. dollar is the functional currency for the foreign subsidiary. The schedule should be prepared using th form: (Round your dollar amounts to nearest whole dollar.) KINER COMPANY'S FOREIGN SUBSIDIARY Remeasurement of Selected Captions into United States Dollars December 31, 20X2, and December 31, 20X1 Balance in Indirect Exchange Remeasured into LCUS Rate U.S. Dollars December 31, 20X1: Accounts receivable (net) 38,000 Inventories, at cost 67,000 Property, plant, and equipment (net) 188,000 Long-term debt 130,000 1.5 LCU = $1 Common stock 140,000 1.7 LCU = $1 December 31, 20X2: Accounts Receivable (net) 43,000 2.0 LCU = $1 Inventories, at cost 72,000 Calculated Property, plant, and equipment (net) 198,800 Long-term debt 110,000 Common stock 140,000