Please must answer Part B and Part C. If you have time have a look on Part A too. I will be thankful of you, I also always love to Rate and Acknowledge your work.
Part - A True or False and Multiple Choice Questions: SLO: 3,5 & 6 (6x1=6 Marks) Question No:1 True or False Questions: Answer all (Write in box True or False) 1. Transfer pricing is setting prices on goods and services exchanged between separate divisions within the same firm and these prices have a direct impact on the profits ofthe different division. 2. Harmonization is the process ofincrease of alternatives while maintaining a low degree of flexibility in accounting practices. ( ) 3. Temporal method objective is to translate financial statements as if the subsidiary had been using the parent's currency. ( ) Part - B Question No:2 Short Theory Questions: Note: Answer the following questions: SLO: 3,5,6 (3 Marks) 1. What are revaluation model of the property, plant and equipment? 2. What is current rate method? 3. What is horizontal analysis? Question No: 3 Numerical Problems: Note: Answer the following questions: SLO: 5 & 6 (2x12=24 Marks) Question No:1 The Pearce Corporation, a US corporation, formed a British subsidiary on January 1, 2017 by investing 550,000 in exchange for all of the subsidiary's no-par common stock. The British subsidiary. Seakam Corporation, purchased real property on April 1, 2017 at a cost of 500.000, with 100.000 allocated to land and 400,000 allocated to the building. The building is depreciated over a 40-year estimated useful life on a straight-line basis with no salvage value. The US dollar is Seakam's functional currency, but it keeps its records in pounds. The British economy does not experience high rates of inflation. Exchange rates for the pound on various dates are: January 01, 2017= 1 = $1.40 April 01, 2017= 1 = $1.42 December 31, 2017 = 1= $1.45 20X7 average rate = 1= $1.44 Seakam's adjusted trial balance is presented below for the year ended December 31, 2017. f Debits: Cash Accounts receivable Notes receivable Building Land Depreciation expense Other expenses Salary expense Total debits 200.000 72.000 99,000 400,000 100,000 7,500 115,000 208.000 1,201,500 f f Credits Accumulated depreciation Accounts payable Common stock Retained earnings Equity adjustment Sales revenue Total credits 7,500 100,000 550.000 0 0 544,000 1,201,500 Required: Prepare under temporal method Seakam's: 1. Translation working papers; 2. Translated income statement; and 3. Translated balance sheet. Question No: 2 The financial statements of Ahmed Company appear below: Ahmed Company Comparative Balance Sheet December 31, Assets Cash........ Short-term investments Accounts receivable (net) Inventory............... Property, plant and equipment(net) Total assets 2019 2018 $ 250,000 $ 400,000 150,000 600,000 500,000 300,000 500,000 700,000 2,600,000 3,000,000 $4,000,000 $5,000,000 Liabilities and stockholders' equity Accounts payable......... Short-term notes payable. Bonds payable ...... Common stock.... Retained earnings..... Total liabilities and stockholders' equity .$ 200,000 $ 300,000 300,000 900,000 900,000 1,600,000 .1,500,000 1,500,000 .1,100,000 700,000 $4,000,000 $5,000,000 Ahmed Company Income Statement For the Year Ended December 31, 2013 $4,000,000 2,400,000 1,600,000 Net sales ..... Cost of goods sold.. Gross profit ....... Expenses Operating expenses Interest expense Total expenses.... Income before income taxes Income tax expense..... Net income.... $420,000 180,000 600,000 1,000,000 300,000 S 700,000
