Q2:

Crimson Lights Inc. (CL) is a 100% wholly owned subsidiary with operations in France. CL was purchased by a Canadian parent on January 1, 2012. The financial records of CL are maintained in euros and provide the following information with respect to equipment, and goodwill.

Equipment - purchased on January 1, 2012 for 250,000 - depreciated over 5 years on a straight-line basis.

Equipment - purchased on January 1, 2013 for 175,000 - depreciated over 5 years on a straight-line basis.

Goodwill - 375,000

Foreign exchange rates were as follows:

January 1, 2012 1 = 1.50

Average for 2012 1 = 1.48

January 1, 2013 1 = 1.46

Average for 2013 1 = 1.45

January 1, 2014 1 = 1.51

Average for 2014 1 = 1.58

December 31, 2014 1 = 1.62

Required:

Assume that CL's functional currency is the euro. Calculate the translated Canadian dollar balances for the following accounts at December 31, 2014.

a. Equipment

b. Accumulated depreciation equipment

c. Depreciation expense

d. Goodwill