Sep 19, 2017

ENWICKE COMPANY ORGANIZED AND BEGAN OPERATING A SUBSIDIARY IN A FOREIGN COUNTRY ON JANUARY 1, 2015,.

This paper concentrates on the primary theme of ENWICKE COMPANY ORGANIZED AND BEGAN OPERATING A SUBSIDIARY IN A FOREIGN COUNTRY ON JANUARY 1, 2015,. in which you have to explain and evaluate its intricate aspects in detail. In addition to this, this paper has been reviewed and purchased by most of the students hence; it has been rated 4.8 points on the scale of 5 points. Besides, the price of this paper starts from £ 40. For more details and full access to the paper, please refer to the site.

enwicke Company organized and began operating a subsidiary in a foreign country on January 1, 2015, by investing LCU 64,000. This subsidiary immediately borrowed LCU 160,000 on a five-year note with 10 percent interest payable annually beginning on January 1, 2016. The subsidiary then purchased for LCU 224,000 a building that had a 10-year anticipated life and no salvage value and is to be depreciated using the straight-line method. Also on January 1, the subsidiary rents the building for three years to a group of local doctors for LCU 7,200 per month. By year-end, payments totaling LCU 72,000 had been received. On October 1, LCU 3,600 was paid for a repair made on that date. The subsidiary transferred a cash dividend of LCU 5,100 back to Fenwicke on December 31, 2015. The functional currency for the subsidiary is the LCU. Currency exchange rates for 1 LCU follow: January 1, 2015 $ 2.10 = 1 LCU October 1, 2015 1.95 = 1 Average for 2015 1.95 = 1 December 31, 2015 1.80 = 1 Prepare an income statement, statement of retained earnings, and balance sheet for this subsidiary in LCU and then translate these amounts into U.S. dollars. (Amounts to be deducted should be indicated by a minus sign.) FENWICKE COMPANY SUBSIDIARY Income Statement For the Year Ended December 31, 2015 LCU U.S. Dollars ? Repair expense ? Interest expense ? Net income 0 $0 FENWICKE COMPANY SUBSIDIARY Statement of Retained Earnings For the Year Ended December 31, 2015 LCU U.S. Dollars Retained earnings, 1/1 Net income Dividends, 12/31 Retained earnings, 12/31 FENWICKE COMPANY SUBSIDIARY Balance Sheet December 31, 2015 LCU U.S. Dollars Assets: Cash Accounts receivable Building Accumulated depreciation Total assets Liabilities and Equities: ? Note payable Common stock Retained earnings Translation adjustment Total liabilities and equities


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