Reference no: EM133043114

Question - Water Bottling Inc. (WBI) is a 100% wholly owned subsidiary with operations in France. WBI was purchased by a Canadian parent on January 1, 20X5, and the FVA was €375,000, all allocated to goodwill.

The financial records of WBI are maintained in euros and provide the following information with respect to equipment and goodwill. Equipment: Purchased on January 1, 20X5, for €250,000, and depreciated over five years on a straight-line basis. Equipment: Purchased on January 1, 20X6, for €175,000, and depreciated over five years on a straight-line basis. Investment property was purchased January 1, 20X7, for €5,600,000. The company uses the fair value method for the investment property. Goodwill had a balance of €375,000.

Foreign exchange rates were as follows:

January 1, 20X5 €1 = 1.50

Average for 20X5 €1 = 1.48

January 1, 20X6 €1 = 1.46

Average for 20X6 €1 = 1.45

January 1, 20X7 €1 = 1.51

Average for 20X7 €1 = 1.58

December 31, 20X7 €1 = 1.60

Using the statement of fact provided above for WBI and assuming that WBI's functional currency is the euro.

Calculate the translated Canadian dollar balances for the following accounts for December 31, 20X7.

a. Equipment

b. Accumulated depreciation-equipment

c. Depreciation expense

d. Goodwill