Question
Journalize the following transaction for both the parent and the subsidiary: Q8 Corporation, a Kuwait based company (Functional currency the KWD), had the following transactions
Journalize the following transaction for both the parent and the subsidiary: Q8 Corporation, a Kuwait based company (Functional currency the KWD), had the following transactions with its parent Bahraini company (Functional currency the BDD):
- January 1, 2020: Sale of equipment (E1) for 100,000 KWD on account. Credit terms: Full payment in 6 months. Interest: 6% per annum.
- October 1, 2020: Sale of additional equipment (E2) for 200,000 KWD payment received by electronic transfer
- December 31, 2020: what would be the amount of depreciation expense in the consolidated financial statement for the equipment (E1 & E2). Use straight-line, no residual value, useful life 5 years. Indicate which method you are using
Additional information:
Exchange rates for KWD against BHD January 1, 2020: 1KWD = 1.24000 BHD;
June 1, 2020: 1KWD = 1.2420 BHD;
July 1, 2020: 1KWD = 1.2290 BHD;
October 1, 2020; 1KWD = 1.2500 BHD
December 1, 2020; 1KWD = 1.2000 BHD.
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Accounting Principles
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
9th Edition
978-0470317549, 9780470387085, 047031754X, 470387084, 978-0470533475
