Parker Sales $ (70,000,000) Cost of goods sold 34,000,000 Depreciation 20,000,000 Other expenses 6,000,000 (2,887,500) Dividend income Net income $ (12,887,500) Retained earnings, 1/1/20 Net income, 2020 $ (48,000,000) (12,887,500) 4,500,000 Dividends, 1/30/20 Retained earnings, 12/31/20 Cash $ (56,387,500) $ 3,687,500 10,000,000 30,000,000 Accounts receivable Inventory Investment in Suffolk $3,200,000 Plant and equipment (net) 105,000,000 Accounts payable (25,500,000) Long-term debt (50,000,000) Common stock (100,000,000) (56,387,500) Retained earnings, 12/31/20 Parker's chief financial officer (CFO) wishes to determine the effect that a change in the value of the British pound would have on consolidated net income and consolidated stockholders' equity. To help assess the foreign currency exposure associated with the investment in Suffolk, the CFO requests assistance in comparing consolidated results under actual exchange rate fluctuations with results that would have occurred had the dollar value of the pound remained constant or declined during the first two years of Parker's ownership. 1. Prepare the 2017 consolidated income statement and the December 31, 2017, consolidated balance sheet.
Parker Sales $ (70,000,000) Cost of goods sold 34,000,000 Depreciation 20,000,000 Other expenses 6,000,000 (2,887,500) Dividend income Net income $ (12,887,500) Retained earnings, 1/1/20 Net income, 2020 $ (48,000,000) (12,887,500) 4,500,000 Dividends, 1/30/20 Retained earnings, 12/31/20 Cash $ (56,387,500) $ 3,687,500 10,000,000 30,000,000 Accounts receivable Inventory Investment in Suffolk $3,200,000 Plant and equipment (net) 105,000,000 Accounts payable (25,500,000) Long-term debt (50,000,000) Common stock (100,000,000) (56,387,500) Retained earnings, 12/31/20 Parker's chief financial officer (CFO) wishes to determine the effect that a change in the value of the British pound would have on consolidated net income and consolidated stockholders' equity. To help assess the foreign currency exposure associated with the investment in Suffolk, the CFO requests assistance in comparing consolidated results under actual exchange rate fluctuations with results that would have occurred had the dollar value of the pound remained constant or declined during the first two years of Parker's ownership. 1. Prepare the 2017 consolidated income statement and the December 31, 2017, consolidated balance sheet.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter12: Intangibles
Section: Chapter Questions
Problem 18E
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