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Use Excel Blue Sky Corporation, a U . S . - based company, invested 1 1 million Polish zloty in Green Mountain Company in Lodz,
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Blue Sky Corporation, a USbased company, invested million Polish zloty in
Green Mountain Company in Lodz, Poland, on January Year when the
exchange rate for the Polish zloty PLN was $ $ million of the $M
zloty was recorded in Common Stock and $ million was recorded in
Additional Paid in Capital. The financial statements of Green Mountain as of
December Year one year later, are presented on the following page:
Additional information:
The December Year ending inventory of PLN was
acquired evenly throughout the fourth quarter of Year. The January
Year beginning inventory was zero.
All fixed assets were on the books when the subsidiary was acquired as
follows:
o PLN of equipment which was acquired on January
Year
o PLN in buildings and PLN in land was
acquired on August Year
o An Additional PLN of land was acquired on December
o An Additional PLN of land was acquired on December
Dividends were declared and paid on December Year
Exchange rates for Year are:
January Year
January Year
Average Year
August Year Fourth quarter, Year
:
December Year :
December Year :
December Year :
The Year financial statements for Green Mountain Company are on the next
page.
Income Statement and Statement of Retained Earnings PLN
Sales
Cost of goods sold
Depreciation expenseequipment
Depreciation expensebuilding
Research and development expense
Other expenses including taxes
Income before remeasurement gain
Remeasurement gainloss Year
Net income
Plus: Retained earnings, Y
Less: Dividends paid
Retained earnings, Y
Balance Sheet
Cash
Accounts receivable net
Inventory
Equipment
Less: accumulated depreciation
Building
Less: accumulated depreciation
Land
Total assets
Accounts payable
Longterm debt
Common stock
Additional paidin capital
Retained earning
AOCI Translation Gain Adjustment
Total
Required
Translate Green Mountains financial statements into US dollars in
accordance with US GAAP at December Year and prove out the
Foreign Exchange gain or loss through a reconciliation schedule:
a Assuming the Polish zloty is the functional currency.
b Assuming the US dollar is the functional currency.
Please provide schedules for any calculations for any account that is a mix rate
ie cost of goods sold
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