Problem 12-17 (Static) Translation, Journal Entries, Consolidated Comprehensive Income, and Stockholders' Equity LO 12-4, 12-5 On January 1, 20X5, Pirate Company acquired all of the outstanding stock of Ship Incorporated, a Norwegian company, at a cost of $151,200 Ship's net assets on the date of acquisition were 700,000 kroner (NKr). On January 1, 20X5, the book and fair values of the Norwegian subsidiary's identifiable assets and liabilities approximated their fair values except for property, plant, and equipment and patents acquired. The fair value of Ship's property, plant, and equipment exceeded its book value by $18,000. The remaining useful life of Ship's equipment at January 1, 20X5, was 10 years. The remainder of the differential was attributable to a patent having an estimated useful life of 5 years. Ship's trial balance on December 31, 20X5, in kroner, follows: Cash Accounts Receivable (net) Inventory Property, Plant and Equipment Accumulated Depreciation Accounts Payable Notes Payable Common Stock Retained Earnings Sales Cost of Goods Sold Operating Expenses Depreciation Expense Dividends Paid Total 410,000 100,000 50,000 40,000 NKr 1,820,000 July 1, 20X3 December 30, 20X4 January 1, 20X5 July 1, 20X5 December 15, 20X5 December 31, 20X5 Average for 20X5 Debits NKr 150,000 200,000 270,000 600,000 NKr 1 = $ 0.15 NKr 1 = $ 0.18 NKr 1 $ 0.18 NKr 1 $ 0.19 NKr 1 NKr 1 NKr 1 = $0.20 Credits Additional Information: 1. Ship uses the FIFO method for its inventory. The beginning inventory was acquired on December 31, 20X4, and ending inventory was acquired on December 15, 20X5. Purchases of NKr420,000 were made evenly throughout 20X5 2. Ship acquired all of its property, plant, and equipment on July 1, 20X3, and uses straight-line depreciation. 3. Ship's sales were made evenly throughout 20X5, and its operating expenses were incurred evenly throughout 20X5 4. The dividends were declared and paid on July 1, 20X5. $ 0.205 $ 0.21 NKr 150,000 90,000 190,000 450,000 250,000 690,000 5. Pirate's income from its own operations was $275,000 for 20X5, and its total stockholders' equity on January 1, 20X5, was $3,500,000 Pirate declared $100,000 of dividends during 20X5. 6 Exchange rates were as follows. NKr 1,820,000 Required: a. Prepare a schedule translating the trial balance from Norwegian kroner into U.S. dollars. Assume the krone is the functional currency.
Complete this question by entering your answers in the tabs below. Assume that Pirate uses the fully adjusted equity method. Record all journal entries that relate t subsidiary during 205. Provide the necessary documentation and support for the amounts in thi the translation adjustment related to the differential. Note: If no entry is required for a transaction/event, select "No journal entry required" in the firs Journal entry worksheet 1 Record the parent's share of the translation adjustment from the translation of the subsidiary's accounts. Note: Enter debits before credits. Journal entry worksheet 3 4 5 mplete this question by entering your answers in the tabs below. Ime that Pirate uses the fully adjusted equity method. Record all journal entries idiary during 20X5. Provide the necessary documentation and support for the ar translation adjustment related to the differential. : If no entry is required for a transaction/event, select "No journal entry require lournal entry worksheet 6 Record the dividend recelved from the foreign subsidiary. Lote: Enter debits before credits. Prepare a schedule translating the trial balance from Norwegian kroner into U.S. dollars. Assume the currency. Note: If no adjustment is needed, select 'No entry necessary'. Required: a. Prepare a schedule translating the trial balance from Norwegian kroner into U.S. dollars currency. b. Assume that Pirate uses the fully adjusted equity method. Record all journal entries tha subsidiary during 205. Provide the necessary documentation and support for the amo schedule of the translation adjustment related to the differential. c. Prepare a schedule that determines Pirate's consolidated comprehensive income for 20 d. Compute Pirate's total consolidated stockholders' equity at December 31, 205. Complete this question by entering your answers in the tabs below. Prepare a schedule that determines Pirate's consolidated comprehensive income for 205. Note: Amounts to be deducted should be indicated with a minus sign. Problem 12-17 (Static) Translation, Journal Entries, Consolidated Comprehensive Income, and Stockholders' Equity LO 12-4, 12.5 On January 1, 20X5, Pirate Company acquired all of the outstanding stock of Ship incorporated, a Norwegian company, at a cost of \$151,200 Ship's net assets on the date of acquisition were 700,000 kroner (NKn). On January 1, 20X5, the book and fair values of the Norwegran subsidiary's identifiable assets and liabilites. approximated their fair values except for property, plant, and equipment and patents acquired The fair value of Ship's property, plant, and equpment exceeded its book value by $18,000. The remaining useful life of Ship's equipment at January 1,205, was 10 years The remainder of the differential was attributable to a patent having an estimated useful life of 5 years. Ships trial baiance on December 31,205, in kroner, follows: Additional Informotion: 1. Ship uses the FIFO method for its inventory The beginning inventory was acquired on December 31,204, and ending inventory was acquired on December 15,205 Purchases of NKi420,000 were made evenly throughout 205 2 Ship acquired all of its property, plant and equipment on July 1,20X3, and uses straight-ine depreciation. 3 Ship's sales were made evenly throughout 205, and its operating expenses were incurred evenly throughour 205 4 the dividends were declared and paid on July 1,205 5 Pirate's income from its own operations was $275,000 for 205, and its total stockholders' equity on January 1,205, was $3,500,000 Pirate declared $100,000 of dividends during 205 6 Exchange rates were as follows: Required: Q. Piepare a schedule translating the trial balance from Nonwegian kroner into US dollars. Assume the krone is the functional currency Assume that Pirate uses the fully adjusted equity method. Record all journal entries that relate to its subsidiary during 205. Provide the necessary documentation and support for the amounts in the jou the translation adjustment related to the differential. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first ac Journal entry worksheet 1 2 3 4 Record the translation adjustment applicable to the differential. Note: Enter debits before credits. was acquired on December 15,205. 2. Ship acquired all of its property, plant, and equipment on July 1,20X3, and uses straight-lin 3. Ship's sales were made evenly throughout 205, and its operating expenses were incurred 4. The dividends were declared and paid on July 1,20X5. 5. Pirate's income from its own operations was $275,000 for 205, and its total stockholders' $3,500,000. Pirate declared $100,000 of dividends during 205. 6. Exchange rates were as follows: Required: o. Prepare a schedule translating the trial balance from Norwegian kroner into U.S. dollars. Assu currency. b. Assume that Pirate uses the fully adjusted equity method. Record all journal entries that relate subsidiary during 205. Provide the necessary documentation and support for the amounts in schedule of the translation adjustment related to the differential. c. Prepare a schedule that determines Pirate's consolidated comprehensive income for 205. d. Compute Pirate's total consolidated stockholders' equity at December 31, 205. Complete this question by entering your answers in the tabs below. Compute Pirate's total consolidated stockholders' equity at December 31,205. Complete this question by entering your answers in the tabs below. ssume that Pirate uses the fully adjusted equity method. Record all journal entries that relate ubsidiary during 20X5. Provide the necessary documentation and support for the amounts in ti he translation adjustment related to the differential. ote: If no entry is required for a transaction/event, select "No journal entry required" in the fir Journal entry worksheet Record the equity in the net income of the foreign subsidiary. R Note: Enter debits before credits. aplete this question by entering your answers in the tabs below. me that Pirate uses the fully adjusted equity method. Record all journat entries that relate to idiary during 20X5. Provide the necessary documentation and support for the amounts in the ranslation adjustment related to the differential. If no entry is required for a transaction/event, select "No journal entry required " in the first lournal entry worksheet 1 2 3 4 6 Record the amortization of the differential: Note: Enter debits before credits
