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On January 2, 20X8, Johnson Company acquired a 100% interest in the capital stock of Perth Company for $3,100,000. Any excess cost over book value is attributable to a patent with a 10-year remaining life. At the date of acquisition, Perth's balance sheet contained the following information, please show the work for the problem
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ACC 545, Baker 9e, study assist, updated 11/2/12. Chapter 12 Page 7 of9 Foreign Currency Units Cash Receivables (net) Inventories (FIFO) Plant and Equipment (net) Total 150,000 500,000 1,500,000 2,190,000 Accounts Payable Capital Stock Retained Earnings Total 200,000 600,000 1,390,000 2,190,000 Perth's income statement for 20X8 is as follows: oreign Currency Units (FCU Revenues from Sales Cost of Goods Sold Gross Margin Operating Expenses (exclusive of depreciation) Depreciation Expense Income Taxes Net Income 1,010,000 590 420,000 (120,000) (200,000) (40,000) 60,000 The balance sheet of Perth at December 31, 20X8, is as follows: ACC 545, Baker 9e, study assist, updated 11/2/12. Chapter 12 Page 7 of9 Foreign Currency Units Cash Receivables (net) Inventories (FIFO) Plant and Equipment (net) Total 150,000 500,000 1,500,000 2,190,000 Accounts Payable Capital Stock Retained Earnings Total 200,000 600,000 1,390,000 2,190,000 Perth's income statement for 20X8 is as follows: oreign Currency Units (FCU) 1,010,000 Revenues from Sales Cost of Goods Sold Gross Margin Operating Expenses (exclusive of depreciation) Depreciation Expense Income Taxes Net Income (590 420,000 (120,000) (200,000) (40,000) 60,000 The balance sheet of Perth at December 31, 20X8, is as follows: 43. Refer to the above information. Assuming the local currency of the country in which Perth Company is located is the functional currency, what are the translated amounts for the items below in U.S. dollars? Retained Earnings at 12/31/08 $2,145,000 $2,155,500 $2,146,000 $2,143,500 Net Income A) 96,000 B) 102,000 C) 93,000 D) 90,000 A. Option A B. Option B C Option C D. Option D Foreign Currency Units (F Cash Receivables (net) Inventories (FIFO) Plant and Equipment (net) Total 210,000 520,000 1,300,000 2,210,000 Accounts Payable Capital Stock Retained Earmings Total 180,000 600,000 1,430,000 2,210,000 Perth declared and paid a dividend of 20,000 FCU on October 1, 20X8. Spot rates at various dates for 20X8 follow: January 2 October 1 December 31 Weighted Average FCU- S1.50 1 FCU$1.60 1 FCU$1.70 FCU- S1.55 Assume Perth's revenues, purchases, operating expenses, depreciation expense, and income taxes were incurred evenly throughout 20X8