GRANT MANAGEMENT CONSULTANTS Comparative Balance Sheets January 1 and December 31, 2014 Jan. 1 Dec. 31 Cash and Receivables 20,000 55,000 Net Property, Plant, and Equipment 40,000 37,000 Totals 60,000 92,000 Accounts and Notes Payable 30,000 32,000 Common Stock 20,000 20,000 Retained Earnings Totals 10,000 40,000 60,000 92,000 GRANT MANAGEMENT CONSULTANTS Consolidated Income and Retained Earnings Statement for the Year Ended December 31, 2014 Revenues Operating Expenses including Depreciation of 3,000 francs Net Income Dividends Declared and Paid Increase in Retained Earnings 75,000 30,000 45,000 15,000 30,000 Direct exchange rates for Swiss franc are: Dollars per Swiss Franc January 1, 2014 $1.09 1.03 1.06 1.08 December 31, 2014 Average for 2014 Dividend declaration and payment date Required: A. Translate the year-end balance sheet and income statement of the foreign subsidiary using the current rate method of translation. B. Prepare a schedule to verify the translation adjustment. EXERCISE 13-4 Foreign Currency Translation-Current Rate Method LO 7 On January 1, 2014, Trenten Systems, a U.S.-based company, purchased a controlling interest in Grant Management Consultants located in Zurich, Switzerland. The acqui- sition was treated as a purchase transaction. The 2014 financial statements stated in Swiss francs are given below