Please complete the problem in attachment. All detail are in the word file. Thanks.

The assignment question is :

Prepare Altman?s 12/31/2013 consolidated balance sheet and statement of operations. Round all numbers to the nearest thousand. Prepare a memo outlining any decisions you made during the process and any authoritative literature you considered.

Background On January 1, 2012, Altman, Inc., a U.S.-based manufacturing firm, acquired 80% of Bradford Ltd. (a private entity) in Great Britain. No control premium was paid. The functional and reporting currency of Altman is the USD and the functional currency of Bradford is the GBP. Altman assumes 80% of the seats on the board of directors of Bradford. All decisions significant to Altman require a majority vote of the board of directors. Altman paid 24,000,000pound. Bradford's balance sheet on January 1, 2012, was as follows: Cash . . . . . . . .. . . . . . . . . . 925,000 Accounts payable .. . 675,000 Accounts receivable . . . . . 1,400,000 Long-term debt . . . . .4,000,000 Inventory . . . . . . . . . . . . . 6,050,000 Common stock. . . . . 20,000,000 Plant & equipment (net) 19,000,000 Retained earnings . . 2,700,000 Total . . . . . . . . . . . . . . . . 27,375,000 Total . . . . . . . . . . . . 27,375,000 During the valuation An intangible asset was identified for 25,000 related to trademark. The Company determined it had a five year life. Land (part of property & plant ) was undervalued by 2,300,000 The long-term debt is denominated in EUR: 2.4 M. It existed at the date of acquisition (remeasured to GBP in the above numbers). It is due on 12/31/2015 All other assets were determined to be carried at fair value. On December 31, 2013, two years after the acquisition date, Bradford submitted the following trial balance for consolidation (credit balances are in parentheses): Cash Accounts Receivable Inventory Plant and Equipment (net) Accounts Payable Accounts Payable Debt Common Stock Retained Earnings, 1/1/13 Sales Cost of Goods Sold Depreciation Expense Other Expenses Dividends Declared and paid, 6/30/13 600,000 2,700,000 9,000,000 17,200,000 (500,000) (180,000) (2,400,000) (20,000,000) (3,800,000) (13,900,000) 8,100,000 900,000 950,000 750,000 Other than the payment of dividends in 2013, no intra-entity transactions occurred between the two affiliates. No dividends were declared in 2012. Altman's financial results on 12/31/2013 were as follows: Cash and cash equivalents Investment in Bradford $176,000 $41,545,000 Marketable Securities Accounts Receivable Inventory Fixed Assets Accounts Payable Deferred revenue Deferred tax liability-short term Deferred tax liability-long term Common Stock (no par) AOCI Retained Earnings/Deficit Revenue COGS & Operating Expenses $5,002,000 $9,008,000 $650,000 $7,093,000 $(3,626,000) $(7,289,000) $(425,000) $(1,259,000) $(32,000,000) $ (921,000) $2,579,000 $(72,586,000) $56,935,000 Depreciation Expense Interest Expense Equity in Bradford's earnings Other Income $903,000 $61,000 $(4,898,000) $ (948,000) Relevant exchange rates for one British pound to the USD were: January 1 June 30 December 31 Average 2012 $1.51 NM $1.56 $1.54 2013 1.56 $1.58 $1.53 1.55 Relevant exchange rates for the one British pound to the EUR were: January 1 December 31 2012 $1.20 $1.22 2013 1.22 $1.29 Assume, unless noted, that all activity occurred evenly throughout the year. Footing differences are due to rounding and should be posted to an \"other asset/liability\" or \"other income/expense\" account. Required Prepare Altman's 12/31/2013 consolidated balance sheet and statement of operations. Round all numbers to the nearest thousand. Prepare a memo outlining any decisions you made during the process and any authoritative literature you considered. Translation of Bradford's balance sheet on acquisition date, 1/1/2012: GBP Asset Cash Accounts Receivable Inventory PPE (net) Rate USD 925,000 1,400,000 6,050,000 19,000,000 27,375,000 $1,396,750 $2,114,000 $9,135,500 $28,690,000 $41,336,250 675,000 4,000,000 20,000,000 2,700,000 27,375,000 Liabilities & Stockholders' Equity Accounts Payable Long-term debt Common Stock Retained Earnings $1.51 $1.51 $1.51 $1.51 $1.51 $1.51 $1.51 $1.51 $1,019,250 $6,040,000 $30,200,000 $4,077,000 $41,336,250 GBP 24,000,000 6,000,000 30,000,000 Rate $1.51 $1.51 $1.51 USD $36,240,000 $9,060,000 $45,300,000 25,025,000 4,975,000 $1.51 $1.51 $37,787,750 $ 7,512,250 Analysis of the acquisition cost: Acquisition cost (no controlling premium paid) Fair Value of NCI (20%) Total Fair Value Book value of Bradford Revaluations: Identifiable intangibles (Trademark) Undervalued land (PPE) Goodwill 80% 20% 100% 22,700,000 25,000 2,300,000 Goodwill allocation: As no control premium was paid, the goodwill is allocated 80% to Altman and 20% to NCI. Total Altman NCI 100% $ 80% 20% 7,512,250 $6,009,800 $1,502,450 Translation of Bradford's Statement of Income and Retained Earnings, 12/31/2013 Translation Rate $1.55 A $1.55 A GBP 13,900,000 -8,100,000 5,800,000 -900,000 -950,000 3,950,000 Sales COGS Gross Profit Depreciation Expense Othe Expenses Net Income Retained earnings, 1/1/2013 Dividends Declared and paid, 6/30/13 Retained earnings, 12/31/2013 USD $21,545,000 ($12,555,000) $8,990,000 ($1,395,000) ($1,472,500) $6,122,500 $1.55 A $1.55 A 3,800,000 -750,000 7,000,000 $1.56 H $1.58 H $5,928,000 ($1,185,000) $10,865,500 Include OCI? Weited-average rate (2013) is used for Sales, COGS and other recurring expenses. Current rate is used for dividends on the date declared and paid. Translation of Bradford's Balance Sheet, 12/31/2013 EUR Asset Cash Accounts Receivable Inventory PPE (net) Total Asset Liabilities & Stockholders' Equity Accounts Payable (GBP) Accounts Payable (EUR) Debt Total Liabilities Common Stock Retained Earnings, 12/31/13 Other Liability Total Equity Total Liabilities and Stockholders' Equity Remeasure Rate GBP Translate Rate USD 600,000 2,700,000 9,000,000 17,200,000 29,500,000 ( 180,000) ( 2,400,000) 1.29 1.29 $1.53 $1.53 $1.53 $1.53 $918,000 $4,131,000 $13,770,000 $26,316,000 $45,135,000 -500,000 -139,535 -1,860,465 -2,500,000 -20,000,000 -7,000,000 $1.53 $1.53 $1.53 ($765,000) ($213,488) ($2,846,512) ($3,825,000) ($30,200,000) ($10,865,500) ($244,500) ($41,310,000) ($45,135,000) $1.51 Above To Balance -27,000,000 -29,500,000 Translation of Bradford's Trial Balance, 12/31/2013 EUR Cash Accounts Receivable Inventory PPE (net) Accounts Payable (GBP) Accounts Payable (EUR) Debt Common Stock Retained Earnings, 1/1/13 Dividends Sales COGS Depreciation Expense Othe Expenses Translation gain / loss (OCI) Totals ( 180,000) ( 2,400,000) Remeasure Rate Translate Rate $1.53 $1.53 $1.53 $1.53 $1.53 $1.53 $1.53 $1.51 $1.56 $1.58 $1.55 $1.55 $1.55 $1.55 GBP 600,000 2,700,000 9,000,000 17,200,000 -500,000 1.29 -139,535 1.29 -1,860,465 -20,000,000 -3,800,000 750,000 -13,900,000 8,100,000 900,000 950,000 0 3) Year-end investment account adjustment Calculation of equity in net income and noncontrolling interest in net income in 2013: Total Bradford's reported net income (80:20) $6,122,500 Adjustment for revaluation write-offs: (80:20) Identifiable intangible asset - trademark - 25,000/5yr -25,000 ($38,750) $1.55A $6,083,750 Equiy in net income and OCI Dr Investment in Bradford $5,062,600 Equity in net income of Bradford Equity in OCI of Bradford Dividends declared and received in 2013 (750,000*$1.58*80%) Cash $948,000 Investment in Bradford Translation adjustment for 2013 Investment in Bradford $244,500 Other Comprehensive Income Investment in Bradford $222,341 Other Comprehensive Income C C C C C C C H H A A A A Equity in Net Income $4,898,000 ($31,000) $4,867,000 USD $918,000 $4,131,000 $13,770,000 $26,316,000 ($765,000) ($213,488) ($2,846,512) ($30,200,000) ($5,928,000) $1,185,000 ($21,545,000) $12,555,000 $1,395,000 $1,472,500 ($244,500) $0 NCI in Net Income $1,224,500 ($7,750) $1,216,750 Cr $4,867,000 Above $195,600 80%*OCI from above $948,000 Above $244,500 From Long term debt adjustment gain $222,341 Use the spot rate on 12/31/2013 to translate asset and liabilitie accounts. Use the historical rate to translate the equity account. Long term debt 12/31/2012 12/31/2013 Adjustment Gain/Loss Altman's Investment balance in Bradford account ( 2,400,000) ( 2,400,000) 1.22 1.29 -1,967,213 -1,860,465 106,748 = $41,545,000+ $5,214,600 - $948,000 = $1.56 $1.53 $ 45,811,600 ($3,068,852) ($2,846,512) $222,341 Gain -> Net Income or OCI? 4) Eliminating Entries at 12/31/2013 (C) Equity in net income of Bradford Equity in OCI of Bradford Dividends Investment in Bradford Dr $4,898,000 $195,600 Cr $948,000 $4,145,600 (E) Capital Stock Retained earnings, 1/1/2013 Investment in Bradford Noncontrolling interest in Bradford $30,200,000 $5,928,000 Goodwill Investment in Bradford Noncontorlling interest in Bradford $7,512,250 $ 28,902,400 $7,225,600 (R) Altman's Investment balance in Bradford account 4,975,000 $1.51 100% $6,009,800 80% $1,502,450 20% *Assets are translated at the end-of-year rate = $41,545,000 - $4,266,600 - $32,852,400 - $5,326,848 = $2,487,200 (O) Operating expense Identifiable intangible assets (trademark) $6,040 25,000/5yr=5, $6,040 $1.51 80% Use historical rate (1/1/2012) (N) Noncontrolling interest in net income Dividends Noncontrolling interest in Bradford $1,216,750 $237,000 $979,750 750,000 $1.58 20% 5) Consolidate Bradford's financial statements Domestic Corp.'s balance sheet account balances, except for the investment account ($3,900,000 = 2,600,000 x $1.53) are assumed Eliminate the translated stockholders' equity of the subsidiary against the investment account; eliminating entry (E) Consolidation working paper, Altman and Bradford, 12/31/2013: Cash and cash equivalennts Marketable securities Accounts Receivable Inventory Fixed Assets (PPE) Investment in Bradford Identifiable intangible aassets Goodwill Accounts Payable Long term debt Deferred revenue Deferred tax liability-short term Deferred tax liability-long term Common Stock (no par) Retained Earnings/Deficit AOCI Noncontrolling interest in Bradford Altman Dr (Cr) $176,000 $5,002,000 $9,008,000 $650,000 $7,093,000 $41,545,000 $0 ($3,626,000) ($7,289,000) ($425,000) ($1,259,000) ($32,000,000) $2,579,000 ($921,000) Dividends Revenue COGS & Operating Expenses Depreciation Expense Interest Expense Other Expense Equity in Bradford's earnings Equity in OCI of Bradford Other Income / OCI - Translation gain Noncontrolling interest in net income Noncontrolling interest in OCI Bradford Dr (Cr) $918,000 $0 $4,131,000 $13,770,000 $26,316,000 Eliminations Dr. Cr. $4,145,600 $ 28,902,400 $6,009,800 $6,040 $0 ($978,488) ($2,846,512) ($30,200,000) ($5,928,000) ($21,545,000) $12,555,000 $1,395,000 C E R O $ 7,225,600 $1,502,450 $979,750 $948,000 $237,000 R E R N C N $7,512,250 E $30,200,000 E $10,865,500 $1,185,000 ($72,586,000) $56,935,000 $903,000 $61,000 O $6,040 C C $4,898,000 $195,600 N $1,216,750 $1,472,500 ($4,898,000) ($948,000) $0 Consolidated Balance Sheet $1,094,000 $5,002,000 $13,139,000 $14,420,000 $33,409,000 ($244,500) $0 $54,894,140 $49,956,640 $2,487,200 ? ($6,040) $7,512,250 ($4,604,488) ($2,846,512) ($7,289,000) ($425,000) ($1,259,000) ($32,000,000) $7,516,500 ($921,000) ($7,225,600) ($1,502,450) ($9,707,800) $0 ($94,131,000) $69,496,040 $2,298,000 $61,000 $1,472,500 $0 $195,600 ($1,192,500) $1,216,750 $0 ($3,790,550) Memo In preparing the consolidated financial statements of Altman and Bradford, we used the following standards to base our accounting choices. These standards are used in all accounting companies, so we followed the example of others within this industry We used the FASB standard 210-10-50 to recognize those items that are listed on the Balance Sheet. This standard emphasizes how information is revealed depending on the method the company is using to determine cost. We used multiple FASB standards in section 225-10. Subsection S25 C& S30 helped us to determine when to allocate expenses to the subsidiary. Section 805-10-25 was used to determine if one this is a business transaction or combination. Subtopic 830-10-45 was referenced to identify what the company should list as their functional and local currency. Currently Altman's functional currency is the USD, and Bradford's is the GBP. When we consolidated the two statements we had convert the Pound to US Dollars, because Bradford had to list the same currency as the parent company listed. The functional currency chosen dictates if we are to use current, average, and fixed costs, when we translated the account balances