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 CONSULTANTSComparative Balance SheetsJanuary 1 and December 31, 2014 Jan. 1 Dec. 31Cash and Receivables 20,300 55,200Net Property, Plant, and Equipment 39,600 36,800 Totals 59,900 92,000Accounts and Notes Payable 30,200 31,500Common Stock 19,600 19,600Retained Earnings 10,100 40,900 Totals 59,900 92,000GRANT MANAGEMENT CONSULTANTSConsolidated Income and Retained Earnings Statementfor the Year Ended December 31, 2014Revenues 76,300Operating Expenses including Depreciation of 2,800 francs 30,400Net Income 45,900Dividends Declared and Paid 15,100Increase in Retained Earnings 30,800Direct exchange rates for Swiss franc are: Dollars per FrancJanuary 1, 2014 $0.5987December 31, 2014 0.5321Average for 2014 0.5654Dividend declaration and payment date 0.5810 (a)Translate the year-end balance sheet and income statement of the foreign subsidiary using the current rate method of translation. (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).) SwissFrancs TranslationRate $Consolidated Income and Retained Earnings Statement $ Balance Sheet Total Total

Current Rate method of translation Under this method, translate the items of its financial…

Answered: (a) Translate the year-end balance…

Financial Accounting

14th Edition

ISBN:9781305088436

Author:Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:Carl Warren, Jim Reeve, Jonathan Duchac

Chapter10: Fixed Assets And Intangible Assets

Section: Chapter Questions

Problem 23E

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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	20,300	55,200
Net Property, Plant, and Equipment	39,600	36,800
Totals	59,900	92,000
Accounts and Notes Payable	30,200	31,500
Common Stock	19,600	19,600
Retained Earnings	10,100	40,900
Totals	59,900	92,000

GRANT MANAGEMENT CONSULTANTS Consolidated Income and Retained Earnings Statement for the Year Ended December 31, 2014
Revenues		76,300
Operating Expenses including Depreciation of 2,800 francs		30,400
Net Income		45,900
Dividends Declared and Paid		15,100
Increase in Retained Earnings		30,800

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

(a)

Translate the year-end balance sheet and income statement of the foreign subsidiary using the current rate method of translation. (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	$
Consolidated Income and Retained Earnings Statement
		$






Balance Sheet


Total





Total

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