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On January 1 , 2 0 X 5 , Pirate Company acquired all of the outstanding stock of Ship Incorporated, a Norwegian company, at a
On January X Pirate Company acquired all of the outstanding stock of Ship Incorporated, a Norwegian company, at a cost of $ Ship's net assets on the date of acquisition were kroner On January the book and fair values of the Norwegian subsidiary's identifiable assets and liabilities approximated their fair values except for property, plant, and equipment and patents acquired. The fair value of Ship's property, plant, and equipment exceeded its book value by $ The remaining useful life of Ship's equipment at January was years. The remainder of the differential was attributable to a patent having an estimated useful life of years. Ship's trial balance on December X in kroner, follows: tableDebits,CreditsCashAccounts Receivable netInventoryProperty Plant and Equipment,Accumulated Depreciation,,On January X Pirate Company acquired all of the outstanding stock of Ship Incorporated, a Norwegian company, at a cost of $ Ship's net assets on the date of acquisition were kroner On January the book and fair values of the Norwegian subsidiary's identifiable assets and liabilities approximated their fair values except for property, plant, and equipment and patents acquired. The fair value of Ship's property, plant, and equipment exceeded its book value by $ The remaining useful life of Ship's equipment at January X was years. The remainder of the differential was attributable to a patent having an estimated useful life of years. Ship's trial balance on December X in kroner, follows: tableDebits,CreditsCashAccounts Receivable netInventoryProperty Plant and Equipment,,Accumulated Depreciation,,, The dividends were declared and paid on July Pirate's income from its own operations was $ for and its total stockholders' equity on January was $ Pirate declared $ of dividends during Exchange rates were as follows: July December January X July December X December X Average for X $ $ $ $ $ $ $ $ $ $ $ $ $ $ Assume the US dollar is the functional currency, not the krone. Required: a Prepare a schedule remeasuring the trial balance from Norwegian kroner into US dollars. b Assume that Pirate uses the fully adjusted equity method. Record all journal entries that relate to its investment in the Norwegian subsidiary during X Provide the necessary documentation and support for the amounts in the journal entries. c Prepare a schedule that determines Pirate's consolidated net income for d Compute Pirate's total consolidated stockholders' equity at December
On January X Pirate Company acquired all of the outstanding stock of Ship Incorporated, a Norwegian company, at a cost of $ Ship's net assets on the date of acquisition were kroner On January the book and fair values of the Norwegian subsidiary's identifiable assets and liabilities approximated their fair values except for property, plant, and equipment and patents acquired. The fair value of Ship's property, plant, and equipment exceeded its book value by $ The remaining useful life of Ship's equipment at January was years. The remainder of the differential was attributable to a patent having an estimated useful life of years. Ship's trial balance on December X in kroner, follows:
tableDebits,CreditsCashAccounts Receivable netInventoryProperty Plant and Equipment,Accumulated Depreciation,,On January X Pirate Company acquired all of the outstanding stock of Ship Incorporated, a Norwegian company, at a cost of $ Ship's net assets on the date of acquisition were kroner On January the book and fair values of the Norwegian subsidiary's identifiable assets and liabilities approximated their fair values except for property, plant, and equipment and patents acquired. The fair value of Ship's property, plant, and equipment exceeded its book value by $ The remaining useful life of Ship's equipment at January X was years. The remainder of the differential was attributable to a patent having an estimated useful life of years. Ship's trial balance on December X in kroner, follows:
tableDebits,CreditsCashAccounts Receivable netInventoryProperty Plant and Equipment,,Accumulated Depreciation,,,
The dividends were declared and paid on July
Pirate's income from its own operations was $ for and its total stockholders' equity on January was $ Pirate declared $ of dividends during
Exchange rates were as follows:
July
December
January X
July
December X
December X
Average for X
$
$
$
$
$
$
$
$
$
$
$
$
$
$
Assume the US dollar is the functional currency, not the krone.
Required:
a Prepare a schedule remeasuring the trial balance from Norwegian kroner into US dollars.
b Assume that Pirate uses the fully adjusted equity method. Record all journal entries that relate to its investment in the Norwegian subsidiary during X Provide the necessary documentation and support for the amounts in the journal entries.
c Prepare a schedule that determines Pirate's consolidated net income for
d Compute Pirate's total consolidated stockholders' equity at December
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