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Dorsey Corporation purchased 90% of the common stock of Lansing Company on January 1, 2008. The cost of the investment was equal to the book
Dorsey Corporation purchased 90% of the common stock of Lansing Company on January 1, 2008. The cost of the investment was equal to the book value interest acquired. Lansing Company operates two retail stores and an exporting business in London that specializes in buying and selling British tweeds. The subsidiary provided the following financial statements in pounds to the parent company: LANSING COMPANY Consolidated Income and Retained Earnings Statement for the Year Ended December 31, 2014 Sales 2.650,000 Cast of Goods Sold (1,430,000) Depreciation Expense (305,000) Other Expenses (432,000) Net Income 483,000 1/1 Retained Eamings 015,000 1,298,000 Less: Dividends Declared and Paid, December 31 (332,000) 12/31 Retained Eamings 066,000 LANSING COMPANY Balance Sheet December 31, 2014 Cash and Receivables 1,200,000 Inventory 511,000 Property, Plant, and Equipment 3,290,000 Total 5,001,000 Current Liabilities 745,000 Long-Term Notes Payable 1.240,000 Common Stock 2,050,000 Retained Earnings 956,000 Total 5,001,000 Lansing Company was incorporated on January 1, 2006, at which time all the property, plant, and equipment was purchased. The long term nates were issued to partially finance the purchase of the fixed assets. Direct exchange rates for the British pound are as follows: January 1, 2006 January 1, 2008 Average for the last quarter 2013 January 1, 2014 December 31, 2014 Average for 2014 Average for August-December 2014 $1.0996 1.8365 1.5300 1.4919 1.4730 1.4788 1.4950 The January 1, 2014, retained earnings balance of Lansing in dollars was $1,622,143, and the cumulative translation adjustment was a debit balance of $937,068. The beginning inventory of 388,000 was acquired during the last quarter of 2013 and the ending inventory was acquired during the last five months of 2014. Sales were made and purchases and other expenses were incurred evenly during the year. Translate (remeasure) the account balances of Lansing into dollars assuming that the dollar is the functional currency of Lansing Company. (Round answers to O decimal places, e.g. 5,125. Enter loss and debit cumulative translation adjustment using either a negative sign preceding the number c.g. -2,945 or parenthesesc.g. (2,945).) Adjusted Trial Balance () Translation Rate Adjusted Trial Balance ($) Balance Sheet Consolidated Income and Retained Earnings Statement Schedule A - Translation of cost of goods sold
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