On January 1, 20X5, Pirate Company acquired all of the outstanding stock of Ship Inc., a Norwegian company, at a cost of $153,000. 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	161,000
Accounts Receivable (net)		211,000
Inventory		294,000
Property, Plant & Equipment		610,000
Accumulated Depreciation				NKr	166,000
Accounts Payable					102,000
Notes Payable					201,000
Common Stock					430,000
Retained Earnings					270,000
Sales					758,000
Cost of Goods Sold		423,000
Operating Expenses		122,000
Depreciation Expense		65,000
Dividends Paid		41,000
Total	NKr	1,927,000		NKr	1,927,000

Additional Information:

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. Ships 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. Pirates income from its own operations was $251,000 for 20X5, and its total stockholders equity on January 1, 20X5, was $3,500,000. Pirate declared $160,000 of dividends during 20X5.
6. Exchange rates were as follows:

	NKr		$
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

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. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Record the purchase of Ship Inc.

Record the dividend received from the foreign subsidiary.

Record the equity in the net income of the foreign subsidiary.

Record the parent's share of the translation adjustment from the translation of the subsidiary's accounts.

Record the amortization of the differential.

Record the translation adjustment applicable to the differential. 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.