LO3 P7.14 Consolidating an International Subsidiary, Year of AC sidiary. Year of Acquisition On February 1, 2010 way Inc., a U.S. company, acquired all of the outstanding shares of Superbarn Supermarkets tralian chain, for A$150 million in cash. Superbarn's assets and liabilities were reported at approximating fair value, but it had previously unrecorded intangible assets (5-year life, straig valued at A$10 million. Superbarn's functional currency is the Australian dollar (A$). Pathway complete equity method to record its investment in Superbarn on its own books. The January 31.20 trial balances of the two companies are below. 1.2019, Path- markets, an Aus- red at amounts life, straight-line) Pathway uses the anuary 31, 2020 way Superbarn Pathway Dr (Cr) Dr (Cr) (in thousands) A$ 5,000 30,000 355,000 Cash and receivables....... Inventories ............... Plant and equipment, net..... Investment in Superbarn ....... Liabilities....... Capital stock ........ Retained earnings, February 1....................... Dividends. Sales revenue.... Equity in net income of Superbarn. ........ Equity in other comprehensive loss of Superbarn.... Cost of goods sold. Operating expenses... (345,000) (10,000) (20,000) $ 15,000 90,000 776,500 118,650 (874,000) (25,000) (85,000) 2,000 (1,500,000) (6,000) 2,850 1,000,000 485,000 0 (500,000) 400,000 85,000 A$ 0 Exchange rates: February 1, 2019 Average for fiscal 2020... $0.77/A$ .. ................ 0.75/A$ January 31, 2020....... .......................... 0.70/A$ Goodwill arising from the acquisition of Superbarn was impaired by A$5 million in fiscal 2020. Required a. Prepare a working paper to consolidate the trial balances of Pathway and Superbarn for fiscal 2020. b. Present the consolidated balance sheet and statement of comprehensive income for fiscal 2020, in good form. LO3 P7.14 Consolidating an International Subsidiary, Year of AC sidiary. Year of Acquisition On February 1, 2010 way Inc., a U.S. company, acquired all of the outstanding shares of Superbarn Supermarkets tralian chain, for A$150 million in cash. Superbarn's assets and liabilities were reported at approximating fair value, but it had previously unrecorded intangible assets (5-year life, straig valued at A$10 million. Superbarn's functional currency is the Australian dollar (A$). Pathway complete equity method to record its investment in Superbarn on its own books. The January 31.20 trial balances of the two companies are below. 1.2019, Path- markets, an Aus- red at amounts life, straight-line) Pathway uses the anuary 31, 2020 way Superbarn Pathway Dr (Cr) Dr (Cr) (in thousands) A$ 5,000 30,000 355,000 Cash and receivables....... Inventories ............... Plant and equipment, net..... Investment in Superbarn ....... Liabilities....... Capital stock ........ Retained earnings, February 1....................... Dividends. Sales revenue.... Equity in net income of Superbarn. ........ Equity in other comprehensive loss of Superbarn.... Cost of goods sold. Operating expenses... (345,000) (10,000) (20,000) $ 15,000 90,000 776,500 118,650 (874,000) (25,000) (85,000) 2,000 (1,500,000) (6,000) 2,850 1,000,000 485,000 0 (500,000) 400,000 85,000 A$ 0 Exchange rates: February 1, 2019 Average for fiscal 2020... $0.77/A$ .. ................ 0.75/A$ January 31, 2020....... .......................... 0.70/A$ Goodwill arising from the acquisition of Superbarn was impaired by A$5 million in fiscal 2020. Required a. Prepare a working paper to consolidate the trial balances of Pathway and Superbarn for fiscal 2020. b. Present the consolidated balance sheet and statement of comprehensive income for fiscal 2020, in good form
