Following are the unconsolidated balances of John Smith Company and its foreign subsidiaries as of December 31, Year 1 Assume that Subsidiary A is 100 owned by Smith, and that Subsidiary B is 100 owned by Subsidiary A Ignore an investment in subsidiary balances for the purposes of this Assignment Subsidiary B in GBP (British Pounds) Net income 20,000 Assets 150,000 Liabilities 100,000 Equity 50,000 Subsidiary A in euros Net income 40,000 Assets 300,000 Liabilities 200,000 Equity 100,000 Parent in U S dollars Net income 30,000 Assets 600,000 Liabilities 400,000 Equity 200,000 The relevant exchange rates are as follows GBP to euros Year end rate 1 25 Historical rate 1 15 annual weighted average rate 1 20 euro to U S dollars Year end rate 1 30 Historical rate 1 10 Annual weighted average rate 1 25 GBP to USD Year end rate 1 625 Historical rate 1 50 Annual weighted average rate 1 55 Instructions Prepare the consolidated amounts for John Smith Company at the end of Year 1, following the step by step method which is prescribed by the US GAAP and allowed by the IFRS Provide consolidated amounts for John Smith Company following the direct method allowed by the IFRS Make sure you show the details of any calculations supported by authoritative references when answering this question

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Following are the unconsolidated balances of John Smith Company and its foreign subsidiaries as of December 31, Year 1. Assume that Subsidiary A is 100%

Following are the unconsolidated balances of John Smith Company and its foreign subsidiaries as of December 31, Year 1. Assume that Subsidiary A is 100% owned by Smith, and that Subsidiary B is 100% owned by Subsidiary A. Ignore an investment in subsidiary balances for the purposes of this Assignment.

Subsidiary B in GBP (British Pounds):

Net income: 20,000

Assets: 150,000

Liabilities: 100,000

Equity: 50,000

Subsidiary A in euros:

Net income: 40,000

Assets: 300,000

Liabilities: 200,000

Equity: 100,000

Parent in U.S. dollars:

Net income: 30,000

Assets: 600,000

Liabilities: 400,000

Equity: 200,000

The relevant exchange rates are as follows:

GBP to euros: Year-end rate: 1.25
Historical rate: 1.15; annual weighted average rate: 1.20
euro to U.S. dollars: Year-end rate: 1.30; Historical rate: 1.10; Annual weighted average rate: 1.25
GBP to USD: Year-end rate: 1.625; Historical rate: 1.50; Annual weighted average rate: 1.55

Instructions:

Prepare the consolidated amounts for John Smith Company at the end of Year 1, following the step-by-step method which is prescribed by the US GAAP and allowed by the IFRS.
Provide consolidated amounts for John Smith Company following the direct method allowed by the IFRS. Make sure you show the details of any calculations supported by authoritative references when answering this question.