Question

Exercise 13-4

On January 1, 2014, Trenten Systems, a U.S.-based company, purchased a controlling interest in Grant Management Consultants located in Zurich, Switzerland. The acquisition was treated as a purchase transaction. The 2014 financial statements stated in Swiss francs are given below.

GRANT MANAGEMENT CONSULTANTS Comparative Balance Sheets January 1 and December 31, 2014
		Jan. 1		Dec. 31
Cash and Receivables		19,600		54,000
Net Property, Plant, and Equipment		40,000		36,600
Totals		59,600		90,600
Accounts and Notes Payable		30,100		32,100
Common Stock		19,900		19,900
Retained Earnings		9,600		38,600
Totals		59,600		90,600

GRANT MANAGEMENT CONSULTANTS Consolidated Income and Retained Earnings Statement for the Year Ended December 31, 2014
Revenues		74,300
Operating Expenses including Depreciation of 3,400 francs		30,200
Net Income		44,100
Dividends Declared and Paid		15,100
Increase in Retained Earnings		29,000

Direct exchange rates for Swiss franc are:

		Dollars per Franc
January 1, 2014		$0.5987
December 31, 2014		0.5321
Average for 2014		0.5654
Dividend declaration and payment date		0.5810

(NEED HELP WITH PART B)

(b)

Prepare a schedule to verify the translation adjustment. (Round answers to 0 decimal places, e.g. 5,125. Enter loss and debit cumulative translation adjustment using either a negative sign preceding the number e.g. -2,945 or parentheses e.g. (2,945).)

		Swiss Francs		Translation Rate		$
Adjustment for Changes in the Net Asset Position During the YearCumulative Translation Adjustment (debit)Cumulative Translation Adjustment (credit)DividendsExposed Net Asset Position - 1/1Exposed Net Asset Position - 12/31Net Asset Position Translated Using Rate in Effect at Date of TransactionsNet Income				$
Adjustment for Changes in the Net Asset Position During the YearCumulative Translation Adjustment (debit)Cumulative Translation Adjustment (credit)DividendsExposed Net Asset Position - 1/1Exposed Net Asset Position - 12/31Net Asset Position Translated Using Rate in Effect at Date of TransactionsNet Income
Adjustment for Changes in the Net Asset Position During the YearCumulative Translation Adjustment (debit)Cumulative Translation Adjustment (credit)DividendsExposed Net Asset Position - 1/1Exposed Net Asset Position - 12/31Net Asset Position Translated Using Rate in Effect at Date of TransactionsNet Income
Adjustment for Changes in the Net Asset Position During the YearCumulative Translation Adjustment (debit)Cumulative Translation Adjustment (credit)DividendsExposed Net Asset Position - 1/1Exposed Net Asset Position - 12/31Net Asset Position Translated Using Rate in Effect at Date of TransactionsNet Income
Adjustment for Changes in the Net Asset Position During the YearCumulative Translation Adjustment (debit)Cumulative Translation Adjustment (credit)DividendsExposed Net Asset Position - 1/1Exposed Net Asset Position - 12/31Net Asset Position Translated Using Rate in Effect at Date of TransactionsNet Income
Adjustment for Changes in the Net Asset Position During the YearCumulative Translation Adjustment (debit)Cumulative Translation Adjustment (credit)DividendsExposed Net Asset Position - 1/1Exposed Net Asset Position - 12/31Net Asset Position Translated Using Rate in Effect at Date of TransactionsNet Income
Adjustment for Changes in the Net Asset Position During the YearCumulative Translation Adjustment (credit)Cumulative Translation Adjustment (debit)DividendsExposed Net Asset Position - 1/1Exposed Net Asset Position - 12/31Net Asset Position Translated Using Rate in Effect at Date of TransactionsNet Income

Answer 1

Date : Page : GRANTS MANAGEMENT CONSULTANTS BALANCE SHEET AS ON 31 December 2014 Cash and Receivables Net Property, plant and Equipment / 54000 36600 CAXB) 0.5321 28733.4 0.5321 / 19474.86 Total 48208.26 Accounts and Note Payable 32100 0.5321 Common stock 19900 0.5321 Retained Earrings 138600 10,5321 Total 17080.41 10588.79 20539.06 48208.26 Note: The above balance sheet value are converted - into by closing exchange rate le I Dollar per Frone = 0.5321.

DOT Page : and retained Consolidated Income Statement for the year ended Earning, Dec. 31, 2014 Revenue (74300 40.5654) less! - Operating expenses including depreciation (30200 40.5654) 42009.22 17075.08 Net Income 24.934,14 (B) less Dividend 8773.10 Declared and paid (15100X0.5810) Net Increase in Retained Earning (AB) 16161.04 + Note .. Revenue and with average Operating expenses are converted rate le. 0.5654. 2 Dividend decleared and with 0.5810 exchange paid rate are converted value