On January 1, 20X1, Popular Creek Corporation organized SunTime Company as a subsidiary in Switzerland with an initial investment cost of Swiss francs (SFr) 72,000. SunTime’s December 31, 20X1, trial balance in SFr is as follows: Debit Credit Cash SFr 8,600 Accounts Receivable (net) 24,500 Receivable from Popular Creek 6,000 Inventory 26,000 Plant and Equipment 108,000 Accumulated Depreciation SFr 11,900 Accounts Payable 12,300 Bonds Payable 54,500 Common Stock 72,000 Sales 155,400 Cost of Goods Sold 73,500 Depreciation Expense 11,900 Operating Expense 31,000 Dividends Paid 16,600 Total SFr 306,100 SFr 306,100 Additional Information The receivable from Popular Creek is denominated in Swiss francs. Popular Creek's books show a $4,800 payable to SunTime. Purchases of inventory goods are made evenly during the year. Items in the ending inventory were purchased November 1. Equipment is depreciated by the straight-line method with a 10-year life and no residual value. A full year’s depreciation is taken in the year of acquisition. The equipment was acquired on March 1. The dividends were declared and paid on November 1. Exchange rates were as follows: January 1 SFr 1 = $ 0.73 March 1 SFr 1 = $ 0.74 November 1 SFr 1 = $ 0.77 December 31 SFr 1 = $ 0.80 20X1 average SFr 1 = $ 0.75 The Swiss franc is the functional currency. Required: Prepare a schedule translating the December 31, 20X1, trial balance from Swiss francs to dollars.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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On January 1, 20X1, Popular Creek Corporation organized SunTime Company as a subsidiary in Switzerland with an initial investment cost of Swiss francs (SFr) 72,000. SunTime’s December 31, 20X1, trial balance in SFr is as follows:

	Debit	Credit
Cash	SFr 8,600
Accounts Receivable (net)	24,500
Receivable from Popular Creek	6,000
Inventory	26,000
Plant and Equipment	108,000
Accumulated Depreciation		SFr 11,900
Accounts Payable		12,300
Bonds Payable		54,500
Common Stock		72,000
Sales		155,400
Cost of Goods Sold	73,500
Depreciation Expense	11,900
Operating Expense	31,000
Dividends Paid	16,600
Total	SFr 306,100	SFr 306,100

Additional Information

The receivable from Popular Creek is denominated in Swiss francs. Popular Creek's books show a $4,800 payable to SunTime.
Purchases of inventory goods are made evenly during the year. Items in the ending inventory were purchased November 1.
Equipment is depreciated by the straight-line method with a 10-year life and no residual value. A full year’s depreciation is taken in the year of acquisition. The equipment was acquired on March 1.
The dividends were declared and paid on November 1.
Exchange rates were as follows:

January 1	SFr 1 = $ 0.73
March 1	SFr 1 = $ 0.74
November 1	SFr 1 = $ 0.77
December 31	SFr 1 = $ 0.80
20X1 average	SFr 1 = $ 0.75

The Swiss franc is the functional currency.

Required:

Prepare a schedule translating the December 31, 20X1, trial balance from Swiss francs to dollars.

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