Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

do the whole statement of cash flow Sullivan's Island Company began operating a subsidiary in a foreign country on January 1, 2017, by investing capital

do the whole statement of cash flow
image text in transcribed
Sullivan's Island Company began operating a subsidiary in a foreign country on January 1, 2017, by investing capital in the amount of 72,000 pounds. The subsidiary immediately borrowed 148,000 pounds on a five-year note with 10 percent interest payable annually beginning on January 1, 2018. The subsidiary then purchased for 220,000 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 8,400 pounds per month. By year-end, rent payments totaling 84,000 pounds had been received, and 16,800 pounds was in accounts receivable. On October 1, 4,800 pounds was paid for a repair made to the building. The subsidiary transferred a cash dividend of 11,000 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 $ 2.30 - 2.35 - 2.38 - 2.34 - 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.) U.S. Dollars SULLIVAN'S ISLAND COMPANY Statement of Cash Flows Pounds Exchange Rate Operating Activities: Net income 55,400 Add: Depreciation expenses 22,000 Less: Increase in accounts receivable (16,800)| Add: Increase in interest payable 14,800 75,400 Cash flow from operating activities Investing Activities: Purchase of building Cash flow from investing activities Financing Activities

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Regulation Audit Inspection Standards And Risk A Handbook For Street Level Regulators

Authors: John E Brady, Amy J Brady

1st Edition

0993082238, 978-0993082238

More Books

Students also viewed these Accounting questions

Question

If P0 = 12, P1 = 14 , P2 = 14 , then determine 0.

Answered: 1 week ago

Question

4. Identify the challenges facing todays organizations

Answered: 1 week ago