发布时间 : 星期三 文章江西财经大学高级财务会计国际学院题库chapter - 14更新完毕开始阅读de953e9f84254b35eefd34ec
Requirement 3 Stripe Corporation Translated Balance Sheet December 31, 2012
Cash
Accounts receivable Notes receivable Building-net Land
Total assets
Accounts payable Common stock Retained earnings
Total liabilities & equities
Objective: LO5
Difficulty: Moderate
$270,040 483,560 153,860 619,650 162,000 $1,689,110 $314,000 880,000 495,110 $1,689,110 21
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7) On January 1, 2011, Pilgrim Corporation, a U.S. firm, acquired ownership of Settlement Corporation, a foreign company, for $168,000, when Settlement's stockholders' equity consisted of 300,000 local currency units (LCU) and retained earnings of 100,000 LCU. At the time of the acquisition, Settlement's assets and liabilities were fairly valued except for a patent that did not have any recorded book value. All excess purchase cost was attributed to the patent, which had an estimated economic life of 10 years at the date of acquisition. The exchange rate for LCUs on January 1, 2011 was $.40. The functional currency for Settlement is LCU. Settlement's books are maintained in LCU.
A summary of changes in Settlement's stockholders' equity during 2011 and the exchange rates for LCUs is as follows: LCU Rates Dollars Stockholders' equity 1/1/11 400,000 $.40H $160,000 Net income 100,000 .42A 42,000 Dividends 12/1/11 (50,000) .43H (21,500) Equity adjustment 17,500 Stockholders' equity _______ ________ 12/31/11 450,000 .44C $198,000
Required: Determine the following:
1. Fair value of the patent from Pilgrim's investment in Settlement on January 1, 2011 in U.S. dollars.
2. Patent amortization for 2011 in U.S. dollars.
3. Unamortized patent at December 31, 2011 in U.S. dollars.
4. Equity adjustment from the patent in U.S. dollars.
5. Income from Settlement for 2011 in U.S. dollars.
6. Investment in Settlement balance at December 31, 2011 in U.S. dollars.
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Answer: Requirement 1 Patent Fair Value: Cost of investment
Book value acquired 400,000 LCU × $.40 = Patent in dollars
Patent in LCU = $8,000/$.40 per LCU =
Requirement 2 Patent amortization for 2011:
Patent: 20,000 LCU/10 years = 2,000 LCU per year 2,000 LCU per year × $.42 equals amortization of:
Requirement 3 Unamortized patent:
Patent (20,000 LCU - 2,000 LCU) × $.44 =
Requirement 4 Equity adjustment from patent: Beginning patent (from Req. 1) Patent amortization (from Req. 2) Subtotal
Ending patent (from Req. 3) Equity adjustment
Requirement 5 Income from Settlement: Equity in income
Less: Patent amortization Income from Settlement
Requirement 6 Investment in Settlement balance at 12/31/11:
Cost, January 1, 2011
Add: Income for 2011 (from Req. 5) Less: Dividends
Add: Equity adjustment from patent (from Req. 4) Add: Equity adjustment from translation Investment balance, December 31, 2011
Check: Book value:
Unamortized patent (from Req. 3) Investment balance
Objective: LO7
Difficulty: Moderate
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$168,000 (160,000) $8,000 20,000 $840 $7,920 $8,000 (840) 7,160 7,920 $760 $42,000 (840) $41,160 $168,000 41,160 (21,500)
760 17,500 $205,920 $198,000
7,920 $205,920
8) Plate Corporation, a US company, acquired ownership of Saucer Corporation of Switzerland on
January 1, 2011 for $1,500,000 when Saucer's stockholders' equity in Swiss francs (SF) consisted of 700,000 SF Capital Stock and 300,000 SF Retained Earnings. The exchange rate for Swiss francs was $1.20 on January 1. All excess purchase cost was attributed to a Trademark that did not have a recorded book value. The trademark is to be amortized over 20 years.
Saucer's functional currency is Swiss francs and the records are kept in the same currency. A summary of changes in Saucer's stockholders' equity during 2011 and relevant exchange rates are as follows: In Exchange In Francs Rates Dollars Stockholders' equity 1/1/11 ￡1,000,000 $1.20H $1,200,000 Net income 250,000 1.15A 287,500 Dividends 11/1/11 (100,000) 1.10H (110,000) Equity adjustment (170,000) Stockholders' equity _________ _________ 12/31/11 ￡1,150,000 1.05C $1,207,500
Required: Determine the following:
1. Fair value of the Trademark from Plate's investment in Saucer on January 1, 2011 in U.S. dollars.
2. Trademark amortization for 2011 in U.S. dollars.
3. Unamortized Trademark at December 31, 2011 in U.S. dollars.
4. Equity adjustment from the Trademark in U.S. dollars.
5. Income from Saucer for 2011 in U.S. dollars.
6. Investment in Saucer balance at December 31, 2011 in U.S. dollars.
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Copyright ? 2012 Pearson Education, Inc. Publishing as Prentice Hall