b. Assume that Pirate uses the fully adjusted equity method. Record all journal entries that relate to its investment in the Norwegian subsidiary during 20X5. Provide the necessary documentation and support for the amounts in the journal entries, including a schedule of the translation adjustment related to the differential. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

c. Prepare a schedule that determines Pirates consolidated comprehensive income for 20X5. (Amounts to be deducted should be indicated with a minus sign.)

d. Compute Pirates total consolidated stockholders equity at December 31, 20X5.

On January 1, 20X5, Pirate Company acquired all of the outstanding stock of Ship Inc., a Norwegian company, at a cost of $165,600. Ship's net assets on the date of acquisition were 700,000 kroner (NKr). On January 1, 20X5, the book and fair values of the Norwegian subsidiary's identifiable assets and liabilities approximated their fair values except for property, plant, and equipment and patents acquired. The fair value of Ship's property, plant, and equipment exceeded its book value by $18,000. The remaining useful life of Ship's equipment at January 1, 20X5, was 10 years. The remainder of the differential was attributable to a patent having an estimated useful life of 5 years. Ship's trial balance on December 31, 20X5, in kroner, follows: Debits NKr 157,000 Credits Cash Accounts Receivable (net) Inventory Property, Plant & Equipment Accumulated Depreciation Accounts Payable Notes Payable Common Stock 227,000 274,000 609,000 NKr 156,000 109,000 195,000 430,000 270,000 741,000 Retained Earnings Sales Cost of Goods Sold 417,000 114,000 51,000 52,000 NKr1,901,000 Operating Expenses Depreciation Expense Dividends Paid Total NKr 1,901,000 Additional Information: 1. Ship uses the FIFO method for its inventory. The beginning inventory was acquired on December 31, 20X4, and ending inventory was acquired on December 15, 20X5. Purchases of NKr420,000 were made evenly throughout 20X5 2. Ship acquired all of its property, plant, and equipment on July 1, 20X3, and uses straight-line depreciation. 3. Ship's sales were made evenly throughout 20X5, and its operating expenses were incurred evenly throughout 20X5. 4. The dividends were declared and paid on July 1, 20X5. 5. Pirate's income from its own operations was $258,000 for 20X5, and its total stockholders' equity on January 1, 20ox5, was $3,500,000. Pirate declared $180,000 of dividends during 20X5. 6. Exchange rates were as follows: NKr = 0.15 July 1, 20X3 December 30, 20x4 1 1 =0.18 January 1, 20x5 July 1, 20X5 December 15, 20X5 December 31, 20X5 Average for 20x5 1 =0.18 1 =0.19 1 = 0.205 =0.21 1 = 0.20 1