Par Industries,a U.S.Corporation,purchased Slice Company of New Zealand for $1,411,800 on January 1,2014.Slice's functional currency is the New Zealand dollar (NZ$).Slice's books are kept in NZ$.The book values of Slice's assets and liabilities were equal to fair values,with the exception of land which was valued at NZ$1,300,000.Slice's balance sheet appears below:
Relevant exchange rates are shown below:
January 1,2014 1 NZ$ = $0.78
Average rate 2014 1 NZ$ = $0.79
December 31,2014 1 NZ$ = $0.80
Determine the unrealized translation gain or loss at December 31,2014 relating to the excess allocated to the undervalued land.
On January 1,2014,Placid Corporation acquired a 40% interest in Superior Industries,a Canadian Corporation,for $811,900 when Superior's stockholders' equity consisted of 1,000,000 Canadian dollars (C$)capital stock and C$500,000 retained earnings.Superior's functional currency is the Canadian dollar and the books are kept in the same currency.The exchange rate at the time of the purchase was $1.15 per Canadian dollar.Any excess allocated to patents is to be amortized over 10 years.A summary of changes in the stockholders' equity of Superior during 2014 and related exchange rates follows:
Determine the following:
1.Fair value of the patent from Placid's investment in Superior on January 1,2014 in U.S.dollars
2.Patent amortization for 2014 in U.S.dollars
3.Unamortized patent at December 31,2014 in U.S.dollars
4.Equity adjustment from the patent in U.S.dollars
5.Income from Superior for 2014 in U.S.dollars
6.Investment in Superior balance at December 31,2014 in U.S.dollars
On January 1,2014,Paste Unlimited,a U.S.company,acquired 100% of Sticky Corporation of Italy,paying an excess of 112,500 euros over the book value of Sticky's net assets.The excess was allocated to undervalued equipment with a five year remaining useful life.Sticky's functional currency is the euro,and the books are kept in euros.Exchange rates for the euro for 2014 are:
1.Determine the depreciation expense on the excess allocated to equipment for 2014 in U.S.dollars.
2.Determine the unamortized excess allocated to equipment on December 31,2014 in U.S.dollars.
3.If Sticky's functional currency was the U.S.dollar,what would be the depreciation expense on the excess allocated to the equipment for 2014?
Pritt Company purchased all the outstanding stock of Standy Company (a manufacturing company in Argentina)when the book value of Standy's net assets equaled their fair value.Standy's summarized balance sheet is shown below on January 1,2014,the date of acquisition,and on December 31,2014,when the exchange rates were $.25 and $.20,respectively.The average exchange rate for 2014 was $.23,and Standy paid dividends in 2014 amounting to 300,000 pesos when the exchange rate was $.21.
If Standy's functional currency and reporting currency are the Argentine peso,compute the change to other comprehensive income that would result from the translation of these financial statements at December 31,2014.