Ginvold Co. began operating a subsidiary in a foreign countr…
Ginvold Co. began operating a subsidiary in a foreign country on January 1, 2021 by acquiring all of the common stock for §50,000 Stickles, the local currency. This subsidiary immediately borrowed §120,000 on a five-year note with ten percent interest payable annually beginning on January 1, 2022. A building was then purchased for §170,000 on January 1, 2021. This property had a ten-year anticipated life and no salvage value and was to be depreciated using the straight-line method. The building was immediately rented for three years to a group of local doctors for §6,000 per month. By year-end, payments totaling §60,000 had been received. On October 1, §5,000 were paid for a repair made on that date and it was the only transaction of this kind for the year. A cash dividend of §6,000 was transferred back to Ginvold on December 31, 2021. The functional currency for the subsidiary was the Stickle (§). Currency exchange rates were as follows: January 1, 2021 § 1 = $ 2.40 October 1, 2021 § 1 = $ 2.22 Average for 2021 § 1 = $ 2.28 December 31, 2021 § 1 = $ 2.16 Prepare an income statement for this subsidiary in stickles and then translate these amounts into U.S. dollars.
Read DetailsNorr and Caylor established a partnership on January 1, 2020…
Norr and Caylor established a partnership on January 1, 2020.Norr invested cash of $100,000 and Caylor invested $30,000 in cash and equipment with a book value of $40,000 and fair value of $50,000.For both partners, the beginning capital balance was to equal the initial investment.Norr and Caylor agreed to the following procedure for sharing profits and losses: – 12% interest on the yearly beginning capital balance – $10 per hour of work that can be billed to the partnership’s clients – the remainder allocated ona 3:2 ratio The Articles of Partnership specified that each partner should withdraw no more than $1,000 per month, which is accounted as direct reduction of that partner’s capital balance. For 2020, the partnership’s income was $70,000.Norr had 1,000 billable hours, and Caylor worked 1,400 billable hours.In 2021, the partnership’s income was $24,000, and Norr and Caylor worked 800 and 1,200 billable hours respectively.Each partner withdrew $1,000 per month throughout 2020and 2021. Determine the amount of net income allocated to each partner for 2021. (Round all calculations to the nearest whole dollar.)
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