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Assistant Needed Please Do Not Waste my question Sullivan's Island Company began operating a subsidiary in a foreign country on January 1, 2017, by Investing
Assistant Needed Please Do Not Waste my question
Sullivan's Island Company began operating a subsidiary in a foreign country on January 1, 2017, by Investing capital in the amount of 73,000 pounds. The subsidiary Immediately borrowed 146,000 pounds on a five-year note with 10 percent Interest payable annually beginning on January 1, 2018. The subsidiary then purchased for 219,000 pounds a building that had a 10-year expected life and no salvage value and is to be depreciated using the straight-line method. Also on January 1, 2017, the subsidiary rented the building for three years to a group of local attorneys for 8,100 pounds per month. By year-end, rent payments totaling 81,000 pounds had been received, and 16,200 pounds was in accounts recevable. On October 1, 3,000 pounds was paid for a repair made to the building. The subsidiary transferred a cash dividend of 13,200 pounds back to Sullivan's Island Company on December 31, 2017. The functional currency for the subsidiary is the pound. Currency exchange rates for 1 pound follow: January 1, 2017 October 1, 2017 December 31, 2017 Average for 2017 $ 3.99 = 3.95 = 3.98 = 3.94 1 Pound 1 1 1 Prepare a statement of cash flows In pounds for Sullivan's Island Company's foreign subsidiary and then translate these amounts Into U.S. dollars. (Round your exchange rate answers to 2 decimal places. Amounts to be deducted and cash outflows should be Indicated with minus sign.) Answer is not complete. U.S. Dollars 0 x 0 X xls (63,828) SULLIVAN'S ISLAND COMPANY Statement of Cash Flows Pounds Exchange Rate Operating Activities: Net income Add: Depreciation expenses 3.94 Less: Increase in accounts receivable (16,200) 3.94 Add: Increase in interest payable 3.94 $ 0 Cash flow from operating activities (16,200) Investing Activities: Purchase of building (219,000) 3.90 Cash flow from investing activities $ 210,000) Financing Activities: Capital contribution 73.000 $ 3.90 Borrowing on note 146.000 3.90 Dividends (13,200) 3.98 0 (63,828) (854,100) (854,100) ooo 284.700 589.400 (52,536) 205.800 801.564 Cash flow from financing activities Increase in cash Effect of exchange rate change on cash Beginning balance in cash Ending balance in cash Oo $ 0Step by Step Solution
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