On January 1, 20x1, Kiner Company formed a foreign subsidiary that issued all of its currently outstanding common stock on that date. Selected accounts from the balance sheets, all of which are shown in local currency units, are as follows: December 31 2002 2001 Accounts Receivable (net of allowance for uncollectible accounts of 1,800 LCU on December 31, 20x2, and 1,600 LCU on December 31, 20X1) 1 CU 41,000 ICU 36.000 Inventoriea, at coat 78,000 73,000 Property, plant and Equipment (net of allowance for accumulated depreciation of 39,000 tou on December 31, 20x2, and 14,000 TU on December 31, 20XL) 174,200 154.000 Long-Term Debt 120,000 140,000 Common Stock, authorized 20,000 shares, par value 10 ICU per ahare: 193ued and outstanding, 14,000 shares on December 31, 20x2, and December 31, 20x1 140,000 140,000 Additional Information: 1. Exchange rates are as follows: January 1, 20X1-July 31, 2081 2.0 = 1 August 1, 20X1-October 31, 2081 1.8 = 1 November 1, 20X1-June 30, 2012 1.7 = 1 July 1, 20X2-December 31, 20121.5 = 1 Average monthly rate for 20X2 1.9 = 1 Average monthly rate for 20x2 1.6 = 1 2. An analysis of the accounts receivable balance is as follows: 20x2 | 30X HII Accounts Receivable Balance at beginning of year LCU 37,600 Sales (44,000 LU per month in 20x2 and 39,000 LCU per month in 20x1 528.000 LCU 468,000 Collections (519.600) (429,000) Nrite-otts (May 20X2 and December 20X1) (3,200) (1,400) Balance at end of year LCU 42,800 LCU 37,600 KINER COMPANY'S FOREIGN SUBSIDIARY Translation of selected Captions Into United States Dollars December 31, 20x2, and December 31, 20X1 Balance Indirect Translated into in LCUS Exchange Rate U.S. Dollars December 31, 20X1 Accounts receivable (net) 36,000 Inventories, at cost 73,000 Property, plant and equipment (net) 154,000 Long-term debt 140,000 Common stock 140,000 December 31, 20X2 Accounts receivable (net) 41.000 Inventories, al cost 78,000 Property, plant and equipment (net) 174.200 Long-term debt 120,000 Common stock 140,000 Allowance for Uncollectible Accounts: Balance at beginning of year Provision for uncollectible accounts Write-offs (May 20x2 and Deceber 20X1) Balance at end of year 20x2 20x1mm LCU 1,600 3,400 LCU 3,000 13,200) (1,400 ICU 1,800 LCO 1,600 3. An analysis of inventories, for which the first-in, first-out inventory method is used, follows: |||||||||||||||||||||||||||||||||||||||||||||||20x220X1 Inventory at beginning of year LCU 73.000 Purchases (June 20x2 and June 20X1) $10,000 I CU350,000 Goods available for sale LCUSE 3,000 1 CU950.000 Inventory at end of year 70,000) (73,000) Cost of goods gold 1 CU277,000 LCD305,000 4. On January 1, 20X1, Kiner's foreign subsidiary purchased land for 28.000 LCU and plant and equipment for 140,000 LCU. On July 4, 20x2, additional equipment was purchased for 38,000 LCU. Plant and equipment is being depreciated on a straight-line basis over a 10-year period with no residual value. A full year's depreciation is taken in the year of purchase. 5. On January 15, 20X1, 7 percent bonds with a face value of 140,000 LCU were issued. These bonds mature on January 15, 20X7, and the interest is paid semiannually on July 15 and January 15. The first interest payment was made on July 15, 20X1. Required: Prepare a schedule translating the selected accounts into U.S. dollars as of December 31, 20x1, and December 31, 20x2, respectively, assuming that the local currency unit is the foreign subsidiary's functional currency. (Round your dollar amounts to nearest whole dollar.)
