Reference no: EM131216804
Watson Company has a subsidiary in the country of Alonza where the local currency unit is the kamel (KM). On December 31, 2014, the subsidiary has the following balance sheet: Cash KM 11,500 Notes payable (due 2016) KM 24,000 Inventory 17,500 Common stock 25,000 Land 5,000 Retained earnings 12,500 Building 55,000 Accumulated depreciation (27,500) KM 61,500 KM 61,500 The subsidiary acquired the inventory on August 1, 2014, and the land and buildings in 2000. It issued the common stock in 1998. During 2015, the following transactions took place: 2015 Feb. 1 Paid 12,500 KM on the note payable. May 1 Sold entire inventory for 22,000 KM on account. June 1 Sold land for 6,000 KM cash. Aug. 1 Collected all accounts receivable. Sept.1 Signed long-term note to receive 7,000 KM cash. Oct. 1 Bought inventory for 14,000 KM cash. Nov. 1 Bought land for 5,000 KM on account. Dec. 1 Declared and paid 2,600 KM cash dividend to parent. Dec. 31 Recorded depreciation for the entire year of 2,750 KM. The exchange rates for 1 KM are as follows: 1998 1 KM = $ 0.24 2000 1 = 0.21 August 1, 2014 1 = 0.31 December 31, 2014 1 = 0.32 February 1, 2015 1 = 0.33 May 1, 2015 1 = 0.34 June 1, 2015 1 = 0.35 August 1, 2015 1 = 0.37 September 1, 2015 1 = 0.38 October 1, 2015 1 = 0.39 November 1, 2015 1 = 0.40 December 1, 2015 1 = 0.41 December 31, 2015 1 = 0.44 Average for 2015 1 = 0.38 a. If this is a translation, what is the translation adjustment determined solely for 2015? b. If this is a remeasurement, what is the remeasurement gain or loss determined solely for 2015?
|
Management expects no other changes in costs as result
: Randy Plumbing has received a special one-time order for 2,800 toilets (units) at $74 per unit. Randy currently produces and sells 17,250 units at $99 each. This level represents 75% of its capacity. Production costs for these units are $74 per unit,..
|
|
Use to prevent future business information failures
: Recommend a strategy that a company may use to prevent future business information failures. Indicate how the company should approach the implementation of your recommended strategy. Provide support for your recommendation.
|
|
Enter the impact of each transaction on individual items
: The following transactions were completed by the company. Enter the impact of each transaction on individual items of the accounting equation.
|
|
Audited financial statements of the business
: John Clinton, owner of Clinton Company, applied for a bank loan and was informed by the banker that audited financial statements of the business had to be submitted before the bank could consider the loan application. Clinton then retained Arthur Jon..
|
|
What is the remeasurement gain or loss determined solely
: Watson Company has a subsidiary in the country of Alonza where the local currency unit is the kamel (KM). On December 31, 2014, the subsidiary has the following balance sheet: If this is a translation, what is the translation adjustment determined so..
|
|
Independent cases that the annual accounting period ends
: Assume for each of the following independent cases that the annual accounting period ends on December 31, 2014, and that the revenue and expense accounts at that date reflect a loss of $30,000. Assume that the company is a sole proprietorship owned b..
|
|
Cost of goods sold and net income-ending retained earnings
: It is discovered in 2014 that ending inventory in 2012 was understated.What is the effect of the understatement on the following: 2012: Cost of Goods Sold, Net Income, and Ending Retained Earnings
|
|
During its inception-transferred these assets and cash
: During its inception, Devon Company purchased land for $100,000 and a building for $180,000. After exactly 3 years, it transferred these assets and cash of $50,000 to a newly created subsidiary, Regan Company, in exchange for 15,000 shares of Regan's..
|
|
Minimum relevant cost per television in negotiating price
: BC Television makes and sells portable television sets. Each television regularly sells for $200. The following cost data per television are based on a full capacity of 12,000 televisions produced each period: ABC is now selling 7,200 televisions thr..
|