PLEASE SOLVE FOR PART B

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Exercise 13-4 On January 1, 2014, Trenten Systems, a U.S.-based company, purchased a controlling interest in Grant Management Consultants located in Zurich, acquisition was treated as a purchase transaction. The 2014 financial statements stated in Swiss francs are given below. GRANT MANAGEMENT CONSULTANTS Comparative Balance Sheets January 1 and December 31, 2014 Jan. 1 Dec. 31 Cash and Receivables 20,400 55,000 Net Property, Plant, and Equipment 40,200 37,400 Totals 60,600 92,400 Accounts and Notes Payable 29,400 32,000 Common Stock 19,700 19,700 Retained Earnings 11,500 40,700 Totals 60,600 92,400 GRANT MANAGEMENT CONSULTANTS Consolidated Income and Retained Earnings Statement for the Year Ended December 31, 2014 Revenues 74,300 Operating Expenses including Depreciation of 2,800 francs 30,100 Net Income 44,200 Dividends Declared and Paid 15,000 Increase in Retained Earnings 29,200 Direct exchange rates for Swiss franc are: January 1, 2014 December 31, 2014 Average for 2014 Dividend declaration and payment date Dollars per Franc $0.5987 0.5321 0.5654 0.5810 Translate the year-end balance sheet and income statement of the foreign subsidiary using the current rate method of translation. (Round answers to 0 decimal places, e.g. 5,125. Enter loss and debit cumulative translation adjustment using either a negative sign preceding the number e.g. -2,945 or parentheses e.g. (2,945).) Swiss Francs Translation Rate $ Consolidated Income and Retained Earnings Statement Revenues 74300 0.5654 42009.22 Operating Expenses 30100 0.5654 17018.54 Net Income / (Loss) 44200 24990.68 Retained Earnings - 1/1 11500 0.5987 6885.05 55700 31875.73 M Dividends 15000 0.581 8715 Retained Earnings - 12/31 40700 23160.73 Balance Sheet Cash and Receivables 55000 0.5321 29265.5 Net Property, Plant, and Ec 37400 0.5321 19900.54 Total 92400 49166.04 Accounts and Notes Payabl 32000 0.5321 17027.2 Common Stock 19700 0.5987 11794.39 Retained Earnings 40700 23160.73 92400 51982.32 M Cumulative Translation Adj (2816.28) Total 92400 49166.04 (b) Prepare a schedule to verify the translation adjustment. (Round answers to O decimal places, e.g. 5,125. Enter loss and debit cumulative translation adjustment using either a negative sign preceding the number e.g. -2,945 or parentheses e.g. (2,945).) Swiss Francs Translation Rate Adjustment for Changes in the Net Asset Position During the Year Cumulative Translation Adjustment (credit) Cumulative Translation Adjustment (debit) Dividends Exposed Net Asset Position - 1/1 Exposed Net Asset Position - 12/31 Net Asset Position Translated Using Rate in Effect at Date of Transactions Net Income Attempts: 0 5 used SAVE FOR LATER SUBMIT ANSWER Exercise 13-4 On January 1, 2014, Trenten Systems, a U.S.-based company, purchased a controlling interest in Grant Management Consultants located in Zurich, acquisition was treated as a purchase transaction. The 2014 financial statements stated in Swiss francs are given below. GRANT MANAGEMENT CONSULTANTS Comparative Balance Sheets January 1 and December 31, 2014 Jan. 1 Dec. 31 Cash and Receivables 20,400 55,000 Net Property, Plant, and Equipment 40,200 37,400 Totals 60,600 92,400 Accounts and Notes Payable 29,400 32,000 Common Stock 19,700 19,700 Retained Earnings 11,500 40,700 Totals 60,600 92,400 GRANT MANAGEMENT CONSULTANTS Consolidated Income and Retained Earnings Statement for the Year Ended December 31, 2014 Revenues 74,300 Operating Expenses including Depreciation of 2,800 francs 30,100 Net Income 44,200 Dividends Declared and Paid 15,000 Increase in Retained Earnings 29,200 Direct exchange rates for Swiss franc are: January 1, 2014 December 31, 2014 Average for 2014 Dividend declaration and payment date Dollars per Franc $0.5987 0.5321 0.5654 0.5810 Translate the year-end balance sheet and income statement of the foreign subsidiary using the current rate method of translation. (Round answers to 0 decimal places, e.g. 5,125. Enter loss and debit cumulative translation adjustment using either a negative sign preceding the number e.g. -2,945 or parentheses e.g. (2,945).) Swiss Francs Translation Rate $ Consolidated Income and Retained Earnings Statement Revenues 74300 0.5654 42009.22 Operating Expenses 30100 0.5654 17018.54 Net Income / (Loss) 44200 24990.68 Retained Earnings - 1/1 11500 0.5987 6885.05 55700 31875.73 M Dividends 15000 0.581 8715 Retained Earnings - 12/31 40700 23160.73 Balance Sheet Cash and Receivables 55000 0.5321 29265.5 Net Property, Plant, and Ec 37400 0.5321 19900.54 Total 92400 49166.04 Accounts and Notes Payabl 32000 0.5321 17027.2 Common Stock 19700 0.5987 11794.39 Retained Earnings 40700 23160.73 92400 51982.32 M Cumulative Translation Adj (2816.28) Total 92400 49166.04 (b) Prepare a schedule to verify the translation adjustment. (Round answers to O decimal places, e.g. 5,125. Enter loss and debit cumulative translation adjustment using either a negative sign preceding the number e.g. -2,945 or parentheses e.g. (2,945).) Swiss Francs Translation Rate Adjustment for Changes in the Net Asset Position During the Year Cumulative Translation Adjustment (credit) Cumulative Translation Adjustment (debit) Dividends Exposed Net Asset Position - 1/1 Exposed Net Asset Position - 12/31 Net Asset Position Translated Using Rate in Effect at Date of Transactions Net Income Attempts: 0 5 used