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I need the solution and the answer of this question. I am in a hurry, so quick response will be appreciated. Thank you! Sandwich Co.
I need the solution and the answer of this question. I am in a hurry, so quick response will be appreciated. Thank you!
Sandwich Co. is a foreign subsidiary of Pepperoni Co, a Canadian company that reports under ASPE. Sandwich was 100% acquired by Pepperoni on December 31, 2019. Sandwich Co.'s most recent annual financial statements (in FCU) are as follows: Dec 31, 2020 Dec 31, 2019 Cash $300,000 $250,000 Accounts receivable 350,000 325,000 Inventory 500,000 305,000 Plant and equipment (net) 575,000 420,000 1,725,000 1,300,000 Accounts payable $245,000 $200,000 Bonds payable 400,000 400,000 Common stock 600,000 500,000 Retained earnings 480,000 200,000 1,725,000 1,300,000 For the year ended: Dec 31, 2020 Dec 31, 2019 Sales $2,520.000 $1,900.000 Cost of goods sold 1,400,000 1,500,000 Amortization expense 299,000 100,000 Other expenses 205,000 150,000 Total expenses 1,900,000 1,750,000 Net income $620,000 $150,000 - Other information: Equipment on hand at December 31, 2019 was purchased on January 1, 2014 for 700,000 FCU and has an expected useful life of ten years. On December 31, 2019, Sandwich acquired 250,000 FCU of new equipment with an expected useful life of 10 years. Sandwich Co. did not dispose of any equipment in 2020. - Inventory on hand on December 31, 2020 and December 31, 2019 was purchased evenly over the last month of 2020 and 2019, when the exchange rates were $1.33 CAD and $1.51 CAD respectively. All other sales, purchases, and expenses occurred evenly throughout the year. - All other sales, purchases, and expenses occurred evenly throughout the year. Select foreign currency rates: January 1, 2014 1 FCU = $1.10 CAD 31-Dec-2019 1 FCU = $1.34 CAD 31-Mar-2020 1 FCU = $1.41 CAD 31-Dec-2020 1 FCU = $1.57 CAD 2020 average na FCU = $1.53 CAD Required: Part A - Assuming that Pepperoni has determined Sandwich to be an integrated subsidiary, calculate the following translated financial statement balances at December 31, 2020 (including calculations and response in the appropriate section below, adding lines as necessary): (i) Cost of goods sold (ii) Plant & Equipment (iii) Accounts receivable Part B - Assuming that Pepperoni has determined Sandwich to be a self- Part B - Assuming that Pepperoni has determined Sandwich to be a self- sustaining subsidiary, calculate the following translated financial statement balances at December 31, 2020 (including calculations and response in the appropriate section below, adding lines as necessary): (i) Cost of goods sold (ii) Plant & Equipment (iii) Accounts receivableStep by Step Solution
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