please help with OCI changes. it starts at zero.
On 1/1/17, Paper Corporation purchased 100 percent of Simple Company at a cost of $800,000 Paper is a U.S.-based company and Simple is in Cairo, Egypt. Paper uses the equity method to account for its investment in Simple. Simple had common stock of 200,000 LE, APIC of 300,000 LE and Retained Earnings of 900,000 LE at the acquisition date. Any fair value/book value difference is attributable to a patent with a 10-year life. During 2017, the first year of joint operation, Simple reported income of 325,000 Egyptian pounds (LE) which was earned evenly throughout the year. And paid a dividend of 100,000 LE to Paper on June 1. Simple's functional currency is the Egyptian pound. The exchange rates for 1 LE are as follows: 1/1/17 $.50 6/1/17 $.48 Weighted average 2017 | $.46 12/31/17 $.44 6/1/18 (dividend date $.43 Weighted average 2018 $.42 12/31/18 $.40 1. Show that the beginning 2018 Investment in Simple balance on Paper's books is: $794,200. (Hint: you will need to translate Simple's income and dividends as well as compute the change in OCI for the year). 2. Prepare the translated financial statements of Simple assuming the equipment sales occurred on 6/1/18. 3. Prepare the consolidation entries and worksheet for Paper and Simple. 4. Prove the change in OCI that you computed for Paper. Paper/Simple Pre-translation consolidation financials 12/31/18 Paper Simple ($) Egyp Pounds 2,000,000 1,750,000 -1,200,000 -900,000 -200,000 -150,000 -20,000 -75,000 -21,500 -60,000 35,000 ? 915,900 50,000 Sales Cost of goods sold Salary Expense Rent Expense Other Expense Gain on sale of fixed asset Investment Income-Simple Net Income Retained Earnings 1/1/18 Net Income Dividends Retained Earnings 12/31/18 Cash and Receivables Inventory Prepaid items Investment in Simple Fixed assets (net) Total Assets Accounts payable Notes payable-due 2025 Common stock Additional paid-in capital Retained Earnings OCI Total liabilities & Owners Eq. 600,000 1,125,000 600,000 100,000 1,625,000 400,000 655,000 500,000 400,000 70,000 950,000 200,000 200,000 500,000 400,000 1,600,000 2,655,000 250,000 280,000 200,000 300,000 1,625,000 2,655,000 On 1/1/17, Paper Corporation purchased 100 percent of Simple Company at a cost of $800,000 Paper is a U.S.-based company and Simple is in Cairo, Egypt. Paper uses the equity method to account for its investment in Simple. Simple had common stock of 200,000 LE, APIC of 300,000 LE and Retained Earnings of 900,000 LE at the acquisition date. Any fair value/book value difference is attributable to a patent with a 10-year life. During 2017, the first year of joint operation, Simple reported income of 325,000 Egyptian pounds (LE) which was earned evenly throughout the year. And paid a dividend of 100,000 LE to Paper on June 1. Simple's functional currency is the Egyptian pound. The exchange rates for 1 LE are as follows: 1/1/17 $.50 6/1/17 $.48 Weighted average 2017 | $.46 12/31/17 $.44 6/1/18 (dividend date $.43 Weighted average 2018 $.42 12/31/18 $.40 1. Show that the beginning 2018 Investment in Simple balance on Paper's books is: $794,200. (Hint: you will need to translate Simple's income and dividends as well as compute the change in OCI for the year). 2. Prepare the translated financial statements of Simple assuming the equipment sales occurred on 6/1/18. 3. Prepare the consolidation entries and worksheet for Paper and Simple. 4. Prove the change in OCI that you computed for Paper. Paper/Simple Pre-translation consolidation financials 12/31/18 Paper Simple ($) Egyp Pounds 2,000,000 1,750,000 -1,200,000 -900,000 -200,000 -150,000 -20,000 -75,000 -21,500 -60,000 35,000 ? 915,900 50,000 Sales Cost of goods sold Salary Expense Rent Expense Other Expense Gain on sale of fixed asset Investment Income-Simple Net Income Retained Earnings 1/1/18 Net Income Dividends Retained Earnings 12/31/18 Cash and Receivables Inventory Prepaid items Investment in Simple Fixed assets (net) Total Assets Accounts payable Notes payable-due 2025 Common stock Additional paid-in capital Retained Earnings OCI Total liabilities & Owners Eq. 600,000 1,125,000 600,000 100,000 1,625,000 400,000 655,000 500,000 400,000 70,000 950,000 200,000 200,000 500,000 400,000 1,600,000 2,655,000 250,000 280,000 200,000 300,000 1,625,000 2,655,000
