Question
Digna Co., a subsidiary of Shell Corpo. Began operations at the beginning of 2014. The functional currency of Digna Co. is the Italian lira; the
Digna Co., a subsidiary of Shell Corpo. Began operations at the beginning of 2014. The functional currency of Digna Co. is the Italian lira; the functional currency and reporting currency of Jill Corporation is the Philippine peso. The statement of financial position of Jack Company on January 1, 2014 showed land for 40,000 liras, building for 95,000 liras; machinery for 25,000 liras; long term debt for 50,000 liras; and ordinary share capital of 110,000 liras. A combined statement of income and retained earnings in liras for Jack Company for 2014 is as follows:
Sales 300,000
COGS 200,000
OPEX(including depreciation expense of 12,000) 55,000
Profit 45,000
Beg. R/E -------
Dividends 12,500
Ending R/E 32,500
The statement of financial position for Digna Company in liras on December 31,2014 is presented below.
ASSETS
Cash 9,500
Accounts Receivable 25,000
Inventories 30,000
Land 40,000
Buildings, net 85,500
Machinery, net 22,500
TOTAL ASSETS 212,500
LIABILITIES AND SHAREHOLDER'S EQUITY
Accounts Payable 15,000
Long-term debt 50,000
Ordinary Share Capital 115,000
Retained Earnings 32,500
Total Liabilities and shareholder's equity 212,500
Additional ordinary shares (5,000 liras) was issued in June; dividends were declared and paid in November. The exchange rates for 2014 are as follows:
Beginning of the year 0.50859 per lira
June 0.50732 per lira
November 0.51155 per lira
End of the year 0.51278 per lira
Weighted Averge 0.51168 per lira
Reqd: Translate the financial statements of Digna Company into Philippine Peso. (upload a file)
Correction:
Digna- Jack
Shell- Jill
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