Reference no: EM131809637

Problem - On January 1, 20X1, Popular Creek Corporation organized RoadTime Company as a subsidiary in Switzerland with an initial investment cost of Swiss francs (SFr) 60,000. RoadTime December 31, 20X1, trial balance in SFr is as follows:

Debit Credit

Cash SFr 7,000

Accounts Receivable (net) 20,000

Receivable from Popular Creek 5,000

Inventory 25,000

Plant and Equipment 100,000

Accumulated Depreciation SFr 10,000

Accounts Payable 12,000

Bonds Payable 50,000

Common Stock 60,000

Sales 150,000

Cost of Goods Sold 70,000

Depreciation Expense 10,000

Operating Expense 30,000

Dividends Paid 15,000

Total 282,000 282,000

Additional Information

1. The receivable from Popular Creek is denominated in Swiss francs. Popular Creek books show a $4,000 payable to RoadTime.

2. Purchases of inventory goods are made evenly during the year. Items in the ending inventory were purchased November 1.

3. Equipment is depreciated by the straight-line method with a 10-year life and no residual value. A full year depreciation is taken in the year of acquisition. The equipment was acquired on March 1.

4. The dividends were declared and paid on November 1.

5. Exchange rates were as follows:

January 1 SFr1 = 0.73

March 1 SFr1 = 0.74

November 1 SFr1 = 0.77

December 31 SFr1 = 0.80

20X1 Average SFr1 = 0.75

6. The Swiss franc is the functional currency.

Required - Prepare a schedule translating the December 31, 20X1, trial balance from Swiss francs to dollars.