On January 1, 20X5, Pirate Company acquired all of the outstanding stock of Ship Incorporated, a Norwegian company, at a cost of $153,000. Ship's net assets on the date of acquisition were 700,000 kroner (NKr). On January 1, 20X5, 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 $18,000. The remaining useful life of Ship's equipment at January 1, 20X5, was 10 years. The remainder of the differential was attributable to a patent having an estimated useful life of 5 years. Ship's trial balance on December 31, 20X5, in kroner, follows: Debits Credits Cash Accounts Receivable (net) Inventory Property, Plant and Equipment Accumulated Depreciation Accounts Payable Notes Payable Common Stock Retained Earnings Sales Cost of Goods Sold Operating Expenses Depreciation Expense Dividends Paid Total Additional Information: NKE 162,000 225,000 281,000 613,000 NKr 151,000 99,000 195,000 460,000 240,000 763,000 414,000 117,000 54,000 42,000 NKr 1,908,000 NKr 1,908,000 1. Ship uses the FIFO method for its inventory. The beginning inventory was acquired on December 31, 20X4, and ending inventory was acquired on December 15, 20X5. Purchases of NKr430,000 were made evenly throughout 20X5. 2. Ship acquired all of its property, plant, and equipment on July 1, 20X3, and uses straight-line depreciation. 3. Ship's sales were made evenly throughout 20X5, and its operating expenses were incurred evenly throughout 20X5 4. The dividends were declared and paid on July 1, 20X5. 5. Pirate's income from its own operations was $244,000 for 20X5, and its total stockholders' equity on January 1, 20X5, was $3,600,000. Pirate declared $150,000 of dividends during 20X5. 6. Exchange rates were as follows: Required: a. Prepare a schedule translating the trial balance from Norwegian kroner into U.S. dollars. Assume the krone is the functional currency. b. Assume that Pirate uses the fully adjusted equity method. Record all journal entries that relate to its investment in the Norwegian subsidiary during 20X5. Provide the necessary documentation and support for the amounts in the journal entries, including a schedule of the translation adjustment related to the differential. c. Prepare a schedule that determines Pirate's consolidated comprehensive income for 20X5. d. Compute Pirate's total consolidated stockholders' equity at December 31, 20X5. Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D Prepare a schedule translating the trial balance from Norwegian kroner into U.S. dollars. Assume the krone is the functional currency. Note: If no adjustment is needed, select 'No entry necessary. PIRATE INCORPORATED Trial Balance Translation Item Cash Accounts Receivable (net)) Inventory Property, Plant and Equipment December 31, 20X5 Balance Dollars $ 34,020 47,250 57,605 110,340 1. Ship uses the FIFO method for its inventory. The beginning inventory was acquired on December 31, 20X4, and ending inventory was acquired on December 15, 20X5. Purchases of NKr430,000 were made evenly throughout 20X5. 2. Ship acquired all of its property, plant, and equipment on July 1, 20X3, and uses straight-line depreciation. 3. Ship's sales were made evenly throughout 20X5, and its operating expenses were incurred evenly throughout 20X5. 4. The dividends were declared and paid on July 1, 20X5. 5. Pirate's income from its own operations was $244,000 for 20X5, and its total stockholders' equity on January 1, 20X5, was $3,600,000. Pirate declared $150,000 of dividends during 20X5. 6. Exchange rates were as follows: July 1, 20x3 December 30, 20x4 January 1, 20x5 July 1, 20x5 December 15, 20x5 December 31, 20x5 Average for 20x5 Required: NKr 1 $0.15 NKr 1 $0.18 NKr 1 $0.18 NKE 1 5 0.19 NKr 1$ 0.205 NXr 1 5 0.21 NXr 1 $0.201 a. Prepare a schedule translating the trial balance from Norwegian kroner into U.S. dollars. Assume the krone is the functional currency. b. Assume that Pirate uses the fully adjusted equity method. Record all journal entries that relate to its investment in the Norwegian subsidiary during 20X5. Provide the necessary documentation and support for the amounts in the journal entries, including a schedule of the translation adjustment related to the differential. c. Prepare a schedule that determines Pirate's consolidated comprehensive income for 20X5. d. Compute Pirate's total consolidated stockholders' equity at December 31, 20X5