Chapter 15, Problem 19QA

Kingsfield establishes a subsidiary operation in a foreign country on January 1, 2020. The country’s currency is the rial (R). To start this business, Kingsfield invests 10,000 rials. Of this amount, it spends 3,000 rials immediately to acquire equipment. Later, on April 1, 2020, it also purchases land. All subsidiary operational activities occur at an even rate throughout the year. Kingsfield uses the U.S. dollar as its reporting currency. The U.S. dollar ($) exchange rates for the rial for 2020 follow:         January 1 $ 1.71 April 1   1.59 June 1   1.66 Weighted average   1.64 December 31   1.62     As of December 31, 2020, the subsidiary reports the following trial balance:     Debits   Credits Cash R 8,000       Accounts receivable   9,000       Equipment   3,000       Accumulated depreciation       R 600 Land   5,000       Accounts payable         3,000 Notes payable (due 2028)         5,000 Common stock         10,000 Dividends declared…

Kingsfield establishes a subsidiary operation in a foreign country on January 1, 2017. The country’s currency is the kumquat (KQ). To start this business, Kingsfield invests 10,000 kumquats. Of this amount, it spends 3,000 kumquats immediately to acquire equipment. Later, on April 1, 2017, it also purchases land. All subsidiary operational activities occur at an even rate throughout the year. The U.S. dollar ($) exchange rates for the kumquat for 2017 follow:As of December 31, 2017, the subsidiary reports the following trial balance:A corporation based in East Lansing, Michigan, Kingsfield uses the U.S. dollar as its reporting currency.a. Assume that the subsidiary’s functional currency is the kumquat. Prepare a trial balance for it in U.S. dollars so that 2017 consolidated financial statements can be prepared.b. Assume that the subsidiary’s functional currency is the U.S. dollar. Prepare a trial balance for it in U.S. dollars so that 2017 consolidated financial statements can be…