On January 2, 20X8, Johnson Company acquired a 100% interest in the capital stock of Perth Company for $3,100,000. Any excess cost over book value is attributable to a patent with a 10-year remaining life. At the date of acquisition, Perth's balance sheet contained the following information: Perth's income statement for 20X8 is as follows:
The balance sheet of Perth at December 31, 20X8, is as follows:
Perth declared and paid a dividend of 20,000 FCU on October 1, 20X8. Spot rates at various dates for 20X8 follow:
Assume Perth's revenues, purchases, operating expenses, depreciation expense, and income taxes were incurred evenly throughout 20X8.
Refer to the above information. Assuming Perth's local currency is the functional currency, what is the amount of translation adjustment that appears on Johnson's consolidated financial statements at December 31, 20X8?
A) $419,184 credit
B) $416,884 credit
C) $405,884 debit
D) $398,500 credit

Question

On January 2, 20X8, Johnson Company acquired a 100% interest in the capital stock of Perth Company for $3,100,000. Any excess cost over book value is attributable to a patent with a 10-year remaining life. At the date of acquisition, Perth's balance sheet contained the following information:  Perth's income statement for 20X8 is as follows: 
The balance sheet of Perth at December 31, 20X8, is as follows: 
Perth declared and paid a dividend of 20,000 FCU on October 1, 20X8. Spot rates at various dates for 20X8 follow: 
Assume Perth's revenues, purchases, operating expenses, depreciation expense, and income taxes were incurred evenly throughout 20X8.
Refer to the above information. Assuming Perth's local currency is the functional currency, what is the amount of translation adjustment that appears on Johnson's consolidated financial statements at December 31, 20X8?
A) $419,184 credit 
B) $416,884 credit 
C) $405,884 debit 
D) $398,500 credit

Quizplus · Accepted Answer

The Answer of On January 2, 20X8, Johnson Company acquired a 100% interest in the capital stock of Perth Company for $3,100,000. Any excess cost over book value is attributable to a patent with a 10-year remaining life. At the date of acquisition, Perth's balance sheet contained the following information:  Perth's income statement for 20X8 is as follows: 
The balance sheet of Perth at December 31, 20X8, is as follows: 
Perth declared and paid a dividend of 20,000 FCU on October 1, 20X8. Spot rates at various dates for 20X8 follow: 
Assume Perth's revenues, purchases, operating expenses, depreciation expense, and income taxes were incurred evenly throughout 20X8.
Refer to the above information. Assuming Perth's local currency is the functional currency, what is the amount of translation adjustment that appears on Johnson's consolidated financial statements at December 31, 20X8?
A) $419,184 credit 
B) $416,884 credit 
C) $405,884 debit 
D) $398,500 credit

On January 2, 20X8, Johnson Company Acquired a 100% Interest