Pre-closing Trial Balance of ABC Company and Branch on December 31, can be seen as follows :-

	HOME OFFICE		BRANCH
	Dr.	Cr.	Dr.	Cr.
Cash	$ 78,580		7,000
Accounts Receivable	175,000		5,000
Merchandise Inventory, January 1	185,000
Furniture and Fixture	85,000		3,500
Allowance for Depreciation		38,500		350
Accounts Payable		115,000		2,500
Investment in Branch	70,000
Remittances to Branch	42,100
Remittances from Branch		30,680
Home Office				25,000
Remittance from Home Office				15,000
Remittance to Home Office			11,000
Capital Stock		200,000
Earned Surplus		105,000
Sales		360,000		30,000
Purchases	200,000		12,000
Merchandise shipments to Branch		70,000
Merchandise shipments from Home Office			25,000
Operating Expense	83,500		9,000
Depreciation expenses for Branch			350
	$ 919,180	$ 919,180	72,850	72,850
Merchandise Inventory, December 31
Acquired from Suppliers	$ 100,000	$ 100,000	6,500	6,500
Acquired from Home Office			12,000	12,000
	$ 100,000	$ 100,000	18,500	18,500

* Depreciation is recorded as a separate expense item to facilitate conversion of this item n terms of asset cost.

Instructions

1. Restate the trial balance of branch in US dollar. Show the working paper translating the pounds value into dollars value. (Use the following rates for conversions).

Current rate - exchange rate at end of period. (2.77)

Original - exchange rate on date transaction was completed (rate on date of purchase of asset - furniture and fixtures by the branch - 2.80; rate on date or acquisition of goods from home office, 2.80)

Average rate - 2.78

2. Prepare Working Papers