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Needing help with all those that are blank. Thanks! Fenwicke Company organized and began operating a subsidiary in a foreign country on January 1, 2015,
Needing help with all those that are blank. Thanks!
Fenwicke Company organized and began operating a subsidiary in a foreign country on January 1, 2015, by investing LCU 80,000. This subsidiary immediately borrowed LCU 200,000 on a five-year note with 6 percent interest payable annually beginning on January 1, 2016. The subsidiary then purchased for LCU 280,000 a building that had a 10-year anticipated life and no salvage value and is to be depreciated using the straight-line method. Also on January 1, the subsidiary rents the building for three years to a group of local doctors for LCU 7,500 per month. By year-end, payments totaling LCU 75,000 had been received. On October 1, LCU 4,400 was paid for a repair made on that date. The subsidiary transferred a cash dividend of LCU 5,900 back to Fenwicke on December 31, 2015. The functional currency for the subsidiary is the LCU Currency exchange rates for 1 LCU follow January 1, 2015 October 1, 2015 Average for 2015 December 31, 2015 $ 2.40 1 LCU 2.25 = 1 2.15 = 1 1.90 = 1 Prepare an income statement, statement of retained earnings, and balance sheet for this subsidiary in LCU and then translate these amounts into U.S. dollars. (Amounts to be deducted should be indicated by a minus sign.) FENWICKE COMPANY SUBSIDIARY Income Statement For the Year Ended December 31, 2015 LCU U.S. Dollars ent revenue nterest expense epreciation Expense epair expense Translation adjustment 90,000193,500 (12,000) (25,800) (28,000) (60,200) (9,900) (4,400) 45,600 $ 97,600 FENWICKE COMPANY SUBSIDIARY Statement of Retained Earnings For the Year Ended December 31, 2015 LCU U.S. Dollars Retained earnings, 1/1 45,600 (5,900) 11,210) 39,700 $ 86,390 et income 97,600 dends, 12/31 Retained earnings, 12/31Step by Step Solution
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