You deposit $2100 in a savings account paying 5.5% simple interest. The solution to this problem is not accomplished by an excel formula. Use the formula I = PRT where T is in years
a.    How much interest will you earn in 18 months?

b.    How much will be in your account at the end of 18 months?

On January 1, 2019, ACAF Co. (a Canadian company) purchased 80% of CPA Co. (a U.S. company) at a cost of US$50,000. The book values of CPA Co.'s net assets were equal to fair market values on this date except for the building, which had an FMV of US$65,000 and a remaining useful life of 10 years. Because of a scandal involving one of the company's employees, the company received significant bad press and the year-end goodwill impairment test resulted in a US$1,034 goodwill impairment loss. (Assume all amounts in this example are in thousands.) The balance sheet of CPA in U.S. dollars on January 1, 2019, is as follows: Cash and accounts receivable Inventory Building (net) Total assets Current liabilities Bonds payable Total liabilities CPA Co. Balance Sheet as at January 1, 2019 Common shares Retained earnings Total liabilities and shareholders' equity The following exchange rates were in effect during 2019: January 1, 2019 Average for 2019 December 15, 2019 December 31, 2019 US$1 = $1.40 US$1 = $1.38 US$1 = $1.41 US$1 = $1.39 US$20,000 5,000 55,000 US$ 80,000 US$ 18,000 25,000 43,000 10,000 27,000 US$ 80,000 The financial statements of ACAF Co. and CPA Co. for December 31, 2019, in Canadian and U.S. dollars respectively, are as follows: Cash and accounts receivable Inventory Equipment (net) Building (net) Investment in CPA Co. Current liabilities Bonds payable Mortgage payable Common shares Retained earnings Sales Dividend income Cost of goods sold Gross margin Depreciation Other expenses Net income Balance Sheets as at December 31, 2019 Retained earnings - Opening Dividends Retained earnings - Ending ACAF Co. C$64,000 45,000 80,000 100,000 70,000 C$ 359,000 C$50,000 65,000 60,000 184,000 C$ 359,000 Income Statement and Statement of Retained Earnings for the year ended December 31, 20x3 ACAF Co. C$300,000 2,224 (150,224) C$ 152,000 C$18,000 115,000 133,000 C$ 19,000 C$175,000 (10,000) C$ 184,000 CPA Co. US$32,000 22,000 49,500 US$ 103,500 US$20,000 25,000 10,000 48,500 US$ 103,500 CPA Co. US$75,000 (20,000) US$ 55,000 US$5,500 26,000 31,500 US$ 23,500 US$27,000 (2,000) US$ 48,500 Assume that expenses have been incurred evenly throughout the year, that the inventory on hand was purchased December 15, 2019, and that dividends were paid December 31. The bonds have 10 years to maturity. ACAF Co. values the non-controlling interest in CPA Co. using the fair value enterprise method. Required Prepare the consolidated financial statements of ACAF Co. for the year ending December 31, 2019 assuming the following: 1. CPA Co. is a self-Sustaining operation (Presentation Currency Translation Method) 2. CPA Co. is an Integrated operation (Functional Currency Translation Method) This solution requires the following five steps. Step 1: Acquisition Deferential amortization and goodwill impairment schedule. Step 2: Financial statements translation Step 3: Calculation of gain or loss . Calculation of the other comprehensive income (gain or loss) arising from net assets (self- Sustaining operation only) . Calculation of the foreign exchange translation adjustment (gain or loss) arising from monetary position (Integrated operation only) Step 4: Calculation and allocation of consolidated other comprehensive income (self-Sustaining operation only) Step 5: Consolidation of financial statements