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On January 2, 2022, Maddox Corporation, headquartered in the U.S., established a wholly-owned subsidiary in Mexico City. An initial investment of Ps10,000,000 was made on
On January 2, 2022, Maddox Corporation, headquartered in the U.S., established a wholly-owned subsidiary in Mexico City. An initial investment of Ps10,000,000 was made on that date; the exchange rate was $0.05/peso. During 2022, the following cash transactions occurred at the Mexico City subsidiary. All amounts are in Mexican pesos (Ps). Facilities costs (January 2; 5-year life) Ps1,000,000 Purchase of office equipment (April 1; 10-year life) 300,000 Sales 12,000,000 Merchandise purchases 9,000,000 Operating expenses 3,000,000 The exchange rate was $0.06/Ps in April when the office equipment and Ps3,000,000 of merchandise were purchased. Sales, other merchandise purchases, and operating expenses were assumed to have been made or incurred at an average exchange rate of $0.07/Ps. At year-end, the exchange rate was $0.08/Ps and the ending inventory (FIFO) amounted to Ps2,000,000, purchased when the exchange rate was $0.07/Ps. All depreciation and amortization is straight-line. Required a. Prepare the preclosing trial balance for the Mexico City subsidiary as of December 31, 2022, in U.S. dollars, the subsidiarys functional currency. Use negative signs with your Cr (credit balance) answers, in the P Dr(Cr) and $ Dr(Cr) columns only. Enter answers using all zeros (do not abbreviate answers to millions or thousands)
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