Check my w On January 1, 20X5, Pirate Company acquired all of the outstanding stock of Ship Inc., a Norwegian company, at a cost of $153,000 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 Norwegia 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: Credits Debits NK 160,000 209,000 293,000 627,000 NK Cash Accounts Receivable (net) Inventory Property, plant & Equipment Accumulated Depreciation Accounts Payable Notes Payable Common St Retained Wings Sales Cost of Goods Sold Operating Expenses Depreciation Expense Dividends Paid Total 169,000 105,000 206,000 430,000 270,000 744,000 415,000 111,000 69,000 40,000 NKr1,924,000 NKr1, 924,000 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 $263,000 for 20X5, and its total stockholders' equity on January 1, 20X5, was $3,600,000. Pirate declared $190,000 of dividends during 20X5. 6. Exchange rates were as follows: July 1, 20X3 December 30, 20X4 January 1, 20X5 July 1, 2005 December 15, 20X5 December 31, 2005 Average for 20x5 NK S 1 = 0.15 1 = 0.18 1 = 0.18 1 = 0.19 1 = 0.205 1 = 0.21 1 = 0.20 Required: neck my work 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.) View transaction list View journal entry worksheet No Date General Journal Debit Credit 1 January 01 Investment in Ship Company 153,000 Cash 153,000 2. July 01 Cash Investment in Ship Company 7,600 7,600 3 December 31 Investment in Ship Company Income from subsidiary 29,800 29,800 4 December 31 Investment in Ship Company Other Comprehensive Income - Translation adjustment 21,690 21,690 5 December 31 Income from subsidiary Investment in Ship Company WOER 6 December 31 Investment in Ship Company Other Comprehensive Income - Translation adjustment c. Prepare a schedule that determines Pirate's consolidated comprehensive income for 20X5. (Amounts to be deducted should be indicated with a minus sign.) Income from Pirate's operations for 20X5, exclusive of income from the Norwegian subsidiary Add: Income from the Norwegian subsidiary Deduct: Amortization of differential Pirate's Net Income 29,800 $ 29,800 income Tom Pirates operations for ZVAO exclusive of income from the Norwegian subsidiary Add: Income from the Norwegian subsidiary Deduct: Amortization of differential Pirate's Net Income 29,800 $ 29,800 Pirate's Consolidated Comprehensive Income $ 29,800 d. Compute Pirate's total consolidated stockholders' equity at December 31, 20X5. w Consolidated stockholders' equity