P7.2 Existing Subsidiary- Remeasurement Pennymarkets Corporations, a U.S firm, a
ID: 2526546 • Letter: P
Question
P7.2 Existing Subsidiary- Remeasurement
Pennymarkets Corporations, a U.S firm, acquired Super Valu, on January 1, 2016. SuperValu is a Swedish company that has been in existence for several years and whose functional currency is the U.S. dollar. Comparative account balances for January 1 and December 31, 2016, appear below, measured in krona (kr), the Swedish currency.
Exchanges rates in 2016 were as follow:
Remeasure SuperValu's 2016 ending trial balance into U.S. dollars. Include a schedule calculating the 2016 remeasurement gain or loss, appearing in 2016 income.
Account Balances January 1 December 31 Cash kr 175,000 kr 240,0000 Accounts Receivable, net 400,000 360,000 Plant & Equipment, net 2,320,000 2,000,000 Accounts Payable (535,000) (200,000) Notes Payable (800,000) (600,000) Capital Stock (400,000) (400,000) Retained Earnings (1,160,000) (1,160,000) Sales ---- (1,200,000) Depreciation Expense ---- 320,000 Other Expenses ---- 640,000 Totals kr 0 kr 0Explanation / Answer
Accounts Balance January 01 December 31 Cash 175000*.13 = 22750 240000*.16 = 38400 Accounts Recievable 400000*.13 = 52000 360000*.16 = 57600 Plant & Equipment 2320000*.13 = 301600 2000000*.16 = 320000 Accounts Payable (535000)*.13 = (69550) (200000)*.16 = (32000) Notes Payable (800000)*.13 = (104000) (600000)(96000) Capital Stock (400000)*.13=(52000) (400000)*.16=(64000) Retained earnings (1160000)*.13 = (150800) (1160000)*.16= (185600) Sales (1200000)*.14 = (168000) Depreciation 320000*.16 = 51200 other expense 640000*.14 = 89600 Total
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