On January 1, 20X5, Pirate Company acquired all of the outstanding stock of Ship Inc , a Norwegian company, at a cost of $154,800 Ships net assets on the date of acquisition were 700,000 kroner (NKr) On January 1, 20X5, the book and fair values of the Norwegian subsidiarys identifiable assets and liabilities approximated their fair values except for property, plant, and equipment and patents acquired The fair value of Ships property, plant, and equipment exceeded its book value by $18,000 The remaining useful life of Ships 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 Ships trial balance on December 31, 20X5, in kroner, follows Debits Credits Cash NKr 151,000 Accounts Receivable (net) 215,000 Inventory 284,000 Property, Plant Equipment 608,000 Accumulated Depreciation NKr 164,000 Accounts Payable 91,000 Notes Payable 207,000 Common Stock 440,000 Retained Earnings 260,000 Sales 747,000 Cost of Goods Sold 420,000 Operating Expenses 121,000 Depreciation Expense 61,000 Dividends Paid 49,000 Additional Information 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 Ship acquired all of its property, plant, and equipment on July 1, 20X3, and uses straight line depreciation Ships sales were made evenly throughout 20X5, and its operating expenses were incurred evenly throughout 20X5 The dividends were declared and paid on July 1, 20X5 Pirates income from its own operations was $272,000 for 20X5, and its total stockholders equity on January 1, 20X5, was $3,600,000 Pirate declared $160,000 of dividends during 20X5 Exchange rates were as follows July 1, 20X3 1 0 15 December 30, 20X4 1 0 18 January 1, 20X5 1 0 18 July 1, 20X5 1 0 19 December 15, 20X5 1 0 205 December 31, 20X5 1 0 21 Average for 20X5 1 0 20 a Prepare a schedule translating the trial balance from Norwegian kroner into U S dollars Assume the krone is the functional currency (If no adjustment is needed, select 'no entry necessary' ) 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 (If no entry is required for a transaction event, select No journal entry required in the first account field ) 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 (If no entry is required for a transaction event, select No journal entry required in the first account field ) 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 (If no entry is required for a transaction event, select No journal entry required in the first account field ) c Prepare a schedule that determines Pirates consolidated comprehensive income for 20X5 (Amounts to be deducted should be indicated with a minus sign ) d Compute Pirates total consolidated stockholders equity at December 31, 20X5

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On January 1, 20X5, Pirate Company acquired all of the outstanding stock of Ship Inc., a Norwegian company, at a cost of $154,800. Ships net

On January 1, 20X5, Pirate Company acquired all of the outstanding stock of Ship Inc., a Norwegian company, at a cost of $154,800. Ships net assets on the date of acquisition were 700,000 kroner (NKr). On January 1, 20X5, the book and fair values of the Norwegian subsidiarys identifiable assets and liabilities approximated their fair values except for property, plant, and equipment and patents acquired. The fair value of Ships property, plant, and equipment exceeded its book value by $18,000. The remaining useful life of Ships 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. Ships trial balance on December 31, 20X5, in kroner, follows: Debits Credits Cash NKr 151,000 Accounts Receivable (net) 215,000 Inventory 284,000 Property, Plant & Equipment 608,000 Accumulated Depreciation NKr 164,000 Accounts Payable 91,000 Notes Payable 207,000 Common Stock 440,000 Retained Earnings 260,000 Sales 747,000 Cost of Goods Sold 420,000 Operating Expenses 121,000 Depreciation Expense 61,000 Dividends Paid 49,000

Additional Information:

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.
Ship acquired all of its property, plant, and equipment on July 1, 20X3, and uses straight-line depreciation.
Ships sales were made evenly throughout 20X5, and its operating expenses were incurred evenly throughout 20X5.
The dividends were declared and paid on July 1, 20X5.
Pirates income from its own operations was $272,000 for 20X5, and its total stockholders equity on January 1, 20X5, was $3,600,000. Pirate declared $160,000 of dividends during 20X5.

Exchange rates were as follows:

July 1, 20X3	1	=	0.15
December 30, 20X4	1	=	0.18
January 1, 20X5	1	=	0.18
July 1, 20X5	1	=	0.19
December 15, 20X5	1	=	0.205
December 31, 20X5	1	=	0.21
Average for 20X5	1	=	0.20
a. Prepare a schedule translating the trial balance from Norwegian kroner into U.S. dollars. Assume the krone is the functional currency. (If no adjustment is needed, select 'no entry necessary'.) 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. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) 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. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) 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. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) c. Prepare a schedule that determines Pirates consolidated comprehensive income for 20X5. (Amounts to be deducted should be indicated with a minus sign.) d. Compute Pirates total consolidated stockholders equity at December 31, 20X5.