Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Please be able to answer all the questions being asked for this one question. I don't need to see your work but I also ask
Please be able to answer all the questions being asked for this one question. I don't need to see your work but I also ask to please answer using these numbers and not someone's numbers from a similar question. thanks in advance.
P12-18 Remeasurement, Journal Entries, Consolidated Net Income, and Stockholders' Equity LO 12-6, 12-7 On January 1, 20X5, Pirate Company acquired all of the outstanding stock of Ship Inc., a Norwegian company at a cost of $158,400. Ship's net assets on the date of acquisition were 700.000 kroner (NKI). 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: Credits Debits Nkr 160,000 209,000 286,000 605,000 NKI Cash Accounts Receivable (net) Inventory Property. Plant & Equipment Accumulated Depreciation Accounts Payable Notes Payable Common Stock Retained Earnings Sales Cost of Goods Sold Operating Expenses Depreciation Expense Dividends Paid 160.000 101,000 204,000 440, 800 260.000 722, 000 415,000 112,000 56,000 44,000 Nkr1,887,000 Total Nkr1,887, 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 NKr420,000 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 $271,000 for 20X5, and its total stockholders equity on January 1, 20X5, was $3,500,000. Pirate declared $170,000 of dividends during 20X5. 6. Exchange rates were as follows: 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 NKr420,000 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 $271,000 for 20X5, and its total stockholders' equity on January 1, 20x5 was $3.500,000. Pirate declared $170,000 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 NKE 1 1 1 1 1 1 $ 0.15 0.18 = 0.18 0.19 = 0.205 0.21 0.20 Assume the US dollar is the functional currency, not the krone. Required: a. Prepare a schedule remeasuring the trial balance from Norwegian kroner into U.S. dollars. (If no adjustment is needed, select 'na entry necessary.) Required: a. Prepare a schedule remeasuring the trial balance from Norwegian kroner into U.S. dollars. (If no adjustment is needed, select 'no entry necessary.) U.S. dollars Cash Accounts receivable (net) Inventory Property, plant, and equipment Cost of goods sold Operating expenses Depreciation expense Dividends paid Total Total Debits Accumulated depreciation Accounts payable Notes payable Common stock Retained earnings Sales Total Total credits 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. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet Record the equity in the net income the foreign subsidiary. Note: Enter debits before credits Date General Journal Debit Credit December 31 h Record entry Clear entry View general journal 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. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheetStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started