On January 2, 20X8, Polaris Company acquired a 100% interest…
On January 2, 20X8, Polaris Company acquired a 100% interest in the capital stock of Ski Company for $3,100,000. Any excess cost over book value is attributable to a patent with a 10-year remaining life. At the date of acquisition, Ski’s balance sheet contained the following information: Account Foreign CurrencyUnits (FCU) Cash 40,000 Receivables (net) 150,000 Inventories (FIFO) 500,000 Plant and Equipment (net) 1,500,000 Total 2,190,000 Accounts Payable 200,000 Capital Stock 600,000 Retained Earnings 1,390,000 Total 2,190,000 Ski’s income statement for 20X8 is as follows: Foreign CurrencyUnits (FCU) Revenues from Sales 1,010,000 Cost of Goods Sold (590,000) Gross Margin 420,000 Operating Expenses (exclusive of depreciation) (120,000) Depreciation Expense (200,000) Income Taxes (40,000) Net Income 60,000 The balance sheet of Ski at December 31, 20X8, is as follows: Account Foreign CurrencyUnits (FCU) Cash 180,000 Receivables (net) 210,000 Inventories (FIFO) 520,000 Plant and Equipment (net) 1,300,000 Total 2,210,000 Accounts Payable 180,000 Capital Stock 600,000 Retained Earnings 1,430,000 Total 2,210,000 Ski declared and paid a dividend of 20,000 FCU on October 1, 20X8. Spot rates at various dates for 20X8 follow: January 2 1 FCU = $ 1.50 October 1 1 FCU = $ 1.60 December 31 1 FCU = $ 1.70 Weighted Average 1 FCU = $ 1.55 Assume Ski’s revenues, purchases, operating expenses, depreciation expense, and income taxes were incurred evenly throughout 20X8. Assuming the FCU of the country in which Ski Company is located is the functional currency, what are the translated amounts for the items below in U.S. dollars? Net Income Retained Earningsat 12/31/X8 A) $ 96,000 $ 2,145,000 B) $ 102,000 $ 2,155,500 C) $ 93,000 $ 2,146,000 D) $ 90,000 $ 2,143,500
Read DetailsInterviewing is an observational technique where an analyst…
Interviewing is an observational technique where an analyst spends a period of time observing work and noting how the participants carry out their tasks. It is particularly useful in identifying essential cooperation in work processes
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