Question
A U.S. company acquired a Turkish subsidiary on January 1, 2021. The subsidiarys trial balances for January 1 and December 31, 2021 are presented below.
A U.S. company acquired a Turkish subsidiary on January 1, 2021. The subsidiarys trial balances for January 1 and December 31, 2021 are presented below. All numbers are in thousands of lira.
| January 1, 2021 Balances Dr (Cr) | December 31, 2021 Balances Dr (Cr) |
Cash, receivables | 40,000 | 20,000 |
Plant & equipment, net | 400,000 | 435,000 |
Liabilities | (175,000) | (170,000) |
Capital stock | (115,000) | (115,000) |
Retained earnings, January 1 | (150,000) | (150,000) |
Dividends |
| 15,000 |
Sales revenue |
| (800,000) |
Operating expenses | ________ | 765,000 |
Total | 0 | 0 |
New plant & equipment of 100,000 was acquired in 2021. Operating expenses include 65,000 of depreciation on plant & equipment, of which 10,000 is related to plant & equipment purchased in 2021.
Exchange rates (U.S.$/) are as follows:
January 1, 2021 | $0.32 |
Plant & equipment acquired | 0.33 |
Average for 2021 | 0.35 |
Dividends declared | 0.37 |
December 31, 2021 | 0.40 |
Assume that the subsidiarys functional currency is the U.S. dollar. What are remeasured total assets for the subsidiary at December 31, 2021?
a. $182,000
b. $145,600
c. $148,100
d. $144,900
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