Problem 34 Translation of Financial Statements and Consolidation of a Foreign Subsidiary (Amortization of AAP) Assume that your company owns a subsidiary operating in Canada. The subsidiary maintains its books in the Canadian dollar (CAD) as its functional currency. Following are the subsidiary's financial statements (in CAD) for the most recent year: (CAD) 588,000 (162.400 (203.600) 110.720 335.720 in CAD On CAD) Income statement: Balance sheet Statement of cash flows: Sales 4.200.000 Assets Net income Cost of goods sold 2.520.000) Cash 1.195,300 Change in accounts receivable Grosso 1.680.000 Account 974.400 Change in Inventories... Operating expert (1.022.000 inventory 1.251.500 Change in current labi PPE 2.315.00 Nel income 50 000 Nel cash from operatings 5.736360 Statement of retained earnings Change in PPE.net BOY retained earnings 2.205.000 Labies and holders equity Not income Nel cash from investing activities 588.000 Current liabilities 712.300 Dividende (58.800 Long term bites 1.669.840 Change in long-term det Common stock 280.000 2.734 200 Ending retained Dividends APIC 350.000 Retained emings 2.734 200 Netcash from financing activities Total abilities and Guy 5.736 360 Nel change in cash Beginning cash Ending cash (215,040) (215,040 278.840 (50.800 217840 3530 856,800 1.1950 The relevant exchange rates for the SUS value of the Canadian dollar (CAD)are as follows: BOY rate EOY rate Avg. rate PPE purchase date rate LTD borrowing date rate Dividend rate Historical rate (common stock and APIC). 50.76 $0.82 $0.79 $0.80 $0.80 SO.81 $0.66 Following are financial statements for the parent: Income statement Sales Cost of goods sold Gross proft Equity income Operating experts Netcome Balance sheet $17,320,000 (12.124,000) Cash 5,196,000 Accounts receivable 25,000 Inventory 13.290.300) Equity Investment 52,330 220 PPE, ne $ 2.262.386 2.216.30 3.350.000 3,000 644 17,895.024 $28.621.094 Statement of retained earnings: BOY and Gaming Netcome Dividende Ending and aming $13,680,410 Les and stockholders 2,330.220 Current abilities (547218) Long.com $16,463,414 Commonwlock APIC Pewned ning $ 129,150 Cumulative translation met 212,652 341 302 $ 1.387332 5.000.000 1,173.474 5.455.072 15.463 414 Statement of accumcomp. income BOY cumulative transition adjustment Current year ration gain (0) BOY cumulative translation adjustment $28,821.094 Requirements: a. Translate the subsidiary's income statement, statement of retained earnings, balance sheet, and statement of cashflows into $US (assume that the BOY Retained Earnings is $1.609.650). b. Compute the ending Cumulative Translation Adjustment directly, assuming a BOY balance of $129,150. What journal entries did the parent company make as a result of this computation? Assume the following information: The purchase price for the subsidiary included an AAP asset relating to a Patent that the parent estimated was worth CAD 500,000 more than its book value on the subsidiary's balance sheet The parent is amortizing the AAP asset at a rate of CAD 50,000 per year and the BOY book value of the Patent is CAD 450,000. Using your translated subsidiary financial statements from Parta and the parent's financial data provided in Part prepare the consolidation spreadsheet for the year. --This is the full question, no more info provided Problem 34 Translation of Financial Statements and Consolidation of a Foreign Subsidiary (Amortization of AAP) Assume that your company owns a subsidiary operating in Canada. The subsidiary maintains its books in the Canadian dollar (CAD) as its functional currency. Following are the subsidiary's financial statements (in CAD) for the most recent year: (CAD) 588,000 (162.400 (203.600) 110.720 335.720 in CAD On CAD) Income statement: Balance sheet Statement of cash flows: Sales 4.200.000 Assets Net income Cost of goods sold 2.520.000) Cash 1.195,300 Change in accounts receivable Grosso 1.680.000 Account 974.400 Change in Inventories... Operating expert (1.022.000 inventory 1.251.500 Change in current labi PPE 2.315.00 Nel income 50 000 Nel cash from operatings 5.736360 Statement of retained earnings Change in PPE.net BOY retained earnings 2.205.000 Labies and holders equity Not income Nel cash from investing activities 588.000 Current liabilities 712.300 Dividende (58.800 Long term bites 1.669.840 Change in long-term det Common stock 280.000 2.734 200 Ending retained Dividends APIC 350.000 Retained emings 2.734 200 Netcash from financing activities Total abilities and Guy 5.736 360 Nel change in cash Beginning cash Ending cash (215,040) (215,040 278.840 (50.800 217840 3530 856,800 1.1950 The relevant exchange rates for the SUS value of the Canadian dollar (CAD)are as follows: BOY rate EOY rate Avg. rate PPE purchase date rate LTD borrowing date rate Dividend rate Historical rate (common stock and APIC). 50.76 $0.82 $0.79 $0.80 $0.80 SO.81 $0.66 Following are financial statements for the parent: Income statement Sales Cost of goods sold Gross proft Equity income Operating experts Netcome Balance sheet $17,320,000 (12.124,000) Cash 5,196,000 Accounts receivable 25,000 Inventory 13.290.300) Equity Investment 52,330 220 PPE, ne $ 2.262.386 2.216.30 3.350.000 3,000 644 17,895.024 $28.621.094 Statement of retained earnings: BOY and Gaming Netcome Dividende Ending and aming $13,680,410 Les and stockholders 2,330.220 Current abilities (547218) Long.com $16,463,414 Commonwlock APIC Pewned ning $ 129,150 Cumulative translation met 212,652 341 302 $ 1.387332 5.000.000 1,173.474 5.455.072 15.463 414 Statement of accumcomp. income BOY cumulative transition adjustment Current year ration gain (0) BOY cumulative translation adjustment $28,821.094 Requirements: a. Translate the subsidiary's income statement, statement of retained earnings, balance sheet, and statement of cashflows into $US (assume that the BOY Retained Earnings is $1.609.650). b. Compute the ending Cumulative Translation Adjustment directly, assuming a BOY balance of $129,150. What journal entries did the parent company make as a result of this computation? Assume the following information: The purchase price for the subsidiary included an AAP asset relating to a Patent that the parent estimated was worth CAD 500,000 more than its book value on the subsidiary's balance sheet The parent is amortizing the AAP asset at a rate of CAD 50,000 per year and the BOY book value of the Patent is CAD 450,000. Using your translated subsidiary financial statements from Parta and the parent's financial data provided in Part prepare the consolidation spreadsheet for the year. --This is the full question, no more info provided