Accounting consolidation
Required: (a) Prepare a Canadian-dollar balance sheet at December 31, Year 4, and an income statement for the year then ended, assuming that VTIL's functional currency is as follows: () The Canadian dollar (il) The Indian rupee (Note: There is insufficient information to translate retained earnings and accumulated foreign exchange adjustments. Plug these two items with the amount required to balance the balance sheet.) (Negative amounts should be indicated by a minus sign. Enter your answers in thousands of dollars. Round your intermediate calculations and the final answers to the nearest whole dollar. Omit $ sign in your response.) VICTORIA TEXTILES (India) Limited BALANCE SHEET December 31, Year 4 ($000s) (1) Temporal Current rate method method Cash Accounts receivable Inventories Prepaid expenses Plant assets (net) Current monetary liabilities Unearned revenue Long-term debt Common shares Retained earnings (deficit) plug VICTORIA TEXTILES (India) Limited INCOME STATEMENT for the Year Ended December 31, Year 4 ($000s) Temporal Current rate method method Sales Cost of sales Opening inventory Purchases Closing inventory Gross profit Operating expenses excluding depreciation Depreciation Interest Taxes Net income (loss) before foreign Exchange gains (losses) Foreign exchange gains (losses) Net income (loss) (b) Which method should Victoria Textiles Limited apply to its investment in this subsidiary? Functional currency translation method Presentation currency translation methodFalrchlld Centre is an NFPO funded by government grants and private donations. It was established on January 1, Year 5, to provide counseling services and a drop-in centre for single parents. On January 1, Year 5, the centre leased an old warehouse in the central part of Smalvllle for $1,100 per month. It carried out minor renovations in the warehouse to create a large open area for use as a play area for children and three offices for use by the executive director and counsellors. The lease ans from January 'I, Year 5, to June 3-0, Year 7. By that time, the centre hopes to move Into new quarters that are more sultablefor the activities carried out. The following schedule summarizes the cash flows for the year ended December 31, Year 5: Cash inows: Government grant foroperating poets {Note 1) 5 33,000 Donations from individuals with no restrictions 39,000 Donations from individuals for rent of warehwee for 2% years 33,000 Donations from individuals for purchase of land { Note 3) 35,230 143,230 Cash outows: Renovations of warehouse 24,000 Salary of executive director (Note 4) 15,400 Fees paid to counsellors {Note 4) 15,000 Rent paid for 2% years 33,000 Other operating expenses 15 500 106,900 Cash, and of year 5 35330 ' Additional Information 1. The provincial govemment agreed to provide an operating grant of $33,000 per year. In addition, the government has pledged to match contributions collected by the centre for the purchase of land for construction of a new complex for the centre. The maximum contribution by the government toward the purchaseof land is $66,000. 2. The centre has signed an agreement to purchase a property In the downtown area omeallelle for $148,500. There Is an old house on the property, which is currently used as a rooming house. The closing date is any time between July 1, Year 6, and December 31, Year 6. The centre plans to demolish the existing house and build a new complex. 3. The centre has recently commenced a tundraising program to raise fundsto purchase the land and constructa new building. Sofar, $33,200 has been raised from individuals toward the purchase of the land. In the new year, the centre will focus its efforts to solicit donations from businesses In the area. The provincial government will advance the funds promised under its pledge on the closing date for the purchase of the property. 4. All the people working for the centre are volunteers except for the executive director and the counsellors. The executive director receives a salary of $16,800 a year, while the counsellors bil the centre for professional services rendered based on the number of hours they work at the centre. The director has not yet received her salary for the month of December. One of the counsellors received an advance of $600 in December, Year 5, for work to be performed In January, Year 6. 5. The centre wishes to use the defenal method of accounting for contributions and to segregate its net assets between restricted and unrestricted. It capitalizes the cost of capital assets and an'iorlizes the capital assets over their useful lives. Required: {at Prepare the journal entry to record the pledge, If applicable. (Omit 5 sign in your response.)
