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Given data Financial Statements, 2 0 2 4 Santa Monica Inc Parati SA USD BRL Sales 2 0 , 0 0 0 , 0 0

Given data

Financial Statements, 2024 Santa Monica Inc Parati SA

USD BRL

Sales 20,000,000 2,000,000

Cost of goods sold (9,400,000) (1,200,000)

Salary expense (1,800,000) (150,000)

Rent expense (600,000) (100,000)

Other expenses (220,000) (120,000)

Dividend income-from Parati 20,000 -

Gain on sale of building, 10/1/24 - 70,000

Net income 8,000,000 500,000

Retained earnings, 1/1/24 4,000,000 200,000

Net income 8,000,000 500,000

Dividends, 6/1/24 (2,500,000) (100,000)

Retained earnings, 12/31/24 9,500,000 600,000

Cash and receivables 3,000,000 200,000

Inventory 9,900,000 600,000

Prepaid expenses 100,000 -

Investment in Parati (initial value) 500,000 -

Property, plant, and equipment (net) 40,000,000 900,000

Total assets 53,500,000 1,700,000

Accounts payable 3,400,000 150,000

Notes payable - due in 3 years 1,600,000 250,000

Common stock 30,000,000 500,000

Additional paid-in capital 9,000,000 200,000

Retained earnings, 12/31/24 9,500,000 600,000

Total liabilities and equities 53,500,000 1,700,000

2023 Parati SA

BRL

Net income 300,000

Dividends, 6/1/23 (100,000)

Retained earnings, 12/31/23 200,000

2024 Parati SA

BRL

Parati misclassifed prepaid rent as rent expense 20,000

Exchange Rates USD/BRL

January 1, 2023 0.220

June 1, 2023 0.212

Weighted average rate for 2023 0.210

December 31, 2023 0.205

June 1, 2024 0.200

October 1, 2024 0.175

Weighted average rate for 2024 0.185

December 31, 2024 0.170

Required:

a-1. Translate Parati's 2024 Brazilian real (BRL) financial statements into U.S. dollars (USD).

a-2. Prepare the schedule 1 - translation of retained earnings, 12/31/23.

a-3. Prepare the schedule 2 - calculation of cumulative translation adjustment, 12/31/24.

b-1. Prepare the 12/31/24 Consolidation Worksheet for Santa Monica and Parati.

b-2. Show the calculation of excess of acquisition consideration over book value (Land revaluation).

b-3. Show the calculation of cumulative translation adjustment related to excess of acquisition consideration over book value.

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