Question 1: (10 points): A1, B1, C1, C3

IBM Corporation, a U.S. Company, formed a subsidiary with a new company in Paris on January 1, 2019, by investing 400,000 Euro in exchange for all of the subsidiarys common stock. On July 1, 2019, the subsidiary purchased land for 100,000 Euro and a building for 300,000 Euro. The building is being depreciated over a 40-year life by the straight-line method. The inventory is valued at historical cost.The Euro is the subsidiarys functional currency and its reporting currency. Exchange rates for the Euro on various dates were:

January 1, 2019

1 Euro = 1.51

July 1, 2019

1 Euro = 1.56

December 31, 2019

1 Euro = 1.53

2019 average rate

1 Euro = 1.52

The subsidiarys adjusted trial balance is presented below for the year ended December 31, 2019.

Debits

Credit

Cash

100,000

Accounts receivable

60,000

Inventory

80,000

Land

100,000

Building

300,000

Accumulated depreciation

3,750

Accounts payable

84,000

Notes Payable

16,750

Common stock

400,000

Retained earnings

0

Sales revenue

443,000

Cost of goods sold

213,750

Depreciation expense

3,750

Other expenses

90,000

Total

947,500

947,500

(Using the current rate method)

Instructions:

1. Translated trial balance (round to the nearest dollar) (5 marks)

2. Translated income statement (3 marks)

3. Translated retained earnings statement (2 marks)

4. Translated balance sheet statement (4 marks)

Question 1: (10 points): A1, B1, C1, C3 IBM Corporation, a U.S. Company, formed a subsidiary with a new company in Paris on January 1, 2019, by investing 400,000 Euro in exchange for all of the subsidiary's common stock. On July 1, 2019, the subsidiary purchased land for 100,000 Euro and a building for 300,000 Euro. The building is being depreciated over a 40-year life by the straight-line method. The inventory is valued at historical cost. The Euro is the subsidiary's functional currency and its reporting currency. Exchange rates for the Euro on various dates were: January 1, 2019 July 1, 2019 December 31, 2019 2019 average rate 1 Euro - 1.51 1 Euro = 1.56 1 Euro = 1.53 I Euro - 1.52 The subsidiary's adjusted trial balance is presented below for the year ended December 31, 2019. 3.750 Debits Credit Cash 100,000 Accounts receivable 60,000 Inventory 80,000 Land 100,000 Building 300,000 Accumulated depreciation Accounts payable 84.000 Notes Payable 16,750 Common stock 400.000 Retained earnings 0 Sales revenue 443.000 Cost of goods sold 213,750 Depreciation expense 3.750 Other expenses 90,000 Total 947,500 947.500 (Using the current rate method) Instructions: 1. Translated trial balance (round to the nearest dollar) (5 marks) 2. Translated income statement (3 marks) 3. Translated retained earnings statement (2 marks) 4. Translated balance sheet statement (4 marks) Question 1: (10 points): A1, B1, C1, C3 IBM Corporation, a U.S. Company, formed a subsidiary with a new company in Paris on January 1, 2019, by investing 400,000 Euro in exchange for all of the subsidiary's common stock. On July 1, 2019, the subsidiary purchased land for 100,000 Euro and a building for 300,000 Euro. The building is being depreciated over a 40-year life by the straight-line method. The inventory is valued at historical cost. The Euro is the subsidiary's functional currency and its reporting currency. Exchange rates for the Euro on various dates were: January 1, 2019 July 1, 2019 December 31, 2019 2019 average rate 1 Euro 1.51 1 Euro = 1.56 1 Euro - 1.53 I Euro 1.52 The subsidiary's adjusted trial balance is presented below for the year ended December 31, 2019. Debits Credit Cash 100,000 Accounts receivable 60,000 Inventory 80,000 Land 100,000 Building 300,000 Accumulated depreciation 3.750 Accounts payable 84.000 Notes Payable 16,750 Common stock 400,000 Retained earnings 0 Sales revenue 443.000 Cost of goods sold 213.750 Depreciation expense 3.750 Other expenses 90.000 Total 947,500 947,500 (Using the current rate method) Instructions: 1. Translated trial balance (round to the nearest dollar) (5 marks) 2. Translated income statement (3 marks) 3. Translated retained earnings statement (2 marks) 4. Translated balance sheet statement (4 marks)