On January 1, 2024, 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 2024 financial statements stated in Swiss francs are given below. GRANT MANAGEMENT CONSULTANTS Comparative Balance Sheets January 1 and December 31, 2024 Direct exchange rates for Swiss franc are: Required: A. Translate the year-end balance sheet and income statement of foreign subsidiary using the current rate method of translation. B. Prepare a schedule to verify the translation adjustment. Cash and Receivables Net Property, Plant, and Equipment 40,000 37,000 60,000 92,000 30,000 32,000 20,000 20,000 10,000 40,000 60,000 92,000 Totals Accounts and Notes Payable Common Stock Retained Earnings Totals GRANT MANAGEMENT CONSULTANTS Consolidated Income and Retained Earnings Statement for the Year Ended December 31, 2024 Jan. 1 Dec. 31 20,000 55,000 Revenues 75,000 Operating Expenses including Depreciation of 3,000 francs 30,000 Net Income 45,000 15,000 30,000 Dividends Declared and Paid Increase in Retained Earnings January 1, 2024 December 31, 2024 Average for 2024 Dividend declaration and payment date Dollars per Swiss Franc $1.09 1.03 1.06 1.08
On January 1, 2024, 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 2024 financial statements stated in Swiss francs are given below. GRANT MANAGEMENT CONSULTANTS Comparative Balance Sheets January 1 and December 31, 2024 Direct exchange rates for Swiss franc are: Required: A. Translate the year-end balance sheet and income statement of foreign subsidiary using the current rate method of translation. B. Prepare a schedule to verify the translation adjustment. Cash and Receivables Net Property, Plant, and Equipment 40,000 37,000 60,000 92,000 30,000 32,000 20,000 20,000 10,000 40,000 60,000 92,000 Totals Accounts and Notes Payable Common Stock Retained Earnings Totals GRANT MANAGEMENT CONSULTANTS Consolidated Income and Retained Earnings Statement for the Year Ended December 31, 2024 Jan. 1 Dec. 31 20,000 55,000 Revenues 75,000 Operating Expenses including Depreciation of 3,000 francs 30,000 Net Income 45,000 15,000 30,000 Dividends Declared and Paid Increase in Retained Earnings January 1, 2024 December 31, 2024 Average for 2024 Dividend declaration and payment date Dollars per Swiss Franc $1.09 1.03 1.06 1.08
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:On January 1, 2024, 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 2024 financial statements stated in Swiss francs are given below.
GRANT MANAGEMENT CONSULTANTS
Comparative Balance Sheets
January 1 and December 31, 2024
Direct exchange rates for Swiss franc are:
Required:
A. Translate the year-end balance sheet and income statement of foreign subsidiary using the current rate method of translation.
B. Prepare a schedule to verify the translation adjustment.
Cash and Receivables
Net Property, Plant, and Equipment 40,000 37,000
60,000 92,000
30,000 32,000
20,000 20,000
10,000 40,000
60,000 92,000
Totals
Accounts and Notes Payable
Common Stock
Retained Earnings
Totals
GRANT MANAGEMENT CONSULTANTS
Consolidated Income and Retained Earnings Statement
for the Year Ended December 31, 2024
Jan. 1 Dec. 31
20,000 55,000
Revenues
75,000
Operating Expenses including Depreciation of 3,000 francs 30,000
Net Income
45,000
15,000
30,000
Dividends Declared and Paid
Increase in Retained Earnings
January 1, 2024
December 31, 2024
Average for 2024
Dividend declaration and payment date
Dollars per Swiss Franc
$1.09
1.03
1.06
1.08
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