Answered step by step
Verified Expert Solution
Question
1 Approved Answer
help me out please! Sullivan's Island Company began operating a subsidiary in a foreign country on January 1, 2017 by investing capital in the amount
help me out please!
Sullivan's Island Company began operating a subsidiary in a foreign country on January 1, 2017 by investing capital in the amount of 77,000 pounds. The subsidiary immediately borrowed 141,000 pounds on a five-year note with 10 percent interest payable annually beginning on January 1, 2018. The subsidiary then purchased for 218,000 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 8,200 pounds per month. By year-end, rent payments totaling 82,000 pounds had been received, and 16,400 pounds was in accounts receivable. On October 13,500 pounds was paid for a repair made to the building. The subsidiary transferred a cash dividend of 12,700 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: ses January 1, 2017 October 1, 2017 December 31, 2017 Average for 2017 $3.20 - 1 Pound 3.25 1 3.28 - 3.24 = 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.) SULLIVAN'S ISLAND COMPANY Statement of Cash Flows Pounds Exchange Rate U.S. Dollars Operating Activities: SULLIVAN'S ISLAND COMPANY Statement of Cash Flows Pounds Exchange Rate Operating Activities U.S. Dollars nces Cash flow from operating activities Investing Activities: 0 0 Cash flow from investing activities Financing Activities: Cash flow from financing activities 0 Effect of exchange rate change on cash Beginning balance in cash Ending balance in cash $ 0 Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started