Fenwicke company organized and began operating a subsidiary

Reference no: EM13587630

Fenwicke Company organized and began operating a subsidiary in a foreign country on January 1, 2015, by investing LCU 40,000. This subsidiary immediately borrowed LCU 100,000 on a five-year note with 10 percent interest payable annually beginning on January 1, 2016. The subsidiary then purchased for LCU 140,000 a building that had a 10-year anticipated life and no salvage value and is to be depreciated using the straight-line method. Also on January 1, the subsidiary rents the building for three years to a group of local doctors for LCU 5,000 per month. By year-end, payments totaling LCU 50,000 had been received. On October 1, LCU 4,000 was paid for a repair made on that date. The subsidiary transferred a cash dividend of LCU 5,000 back to Fenwicke on December 31, 2015. The functional currency for the subsidiary is the LCU. Currency exchange rates for 1 LCU follow:

Prepare a statement of cash flows in LCU for Fenwicke's foreign subsidiary and then translate these amounts into U.S. dollars.

Reference no: EM13587630

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