Complete the following worksheet, assuming that on January 1, 2016, Weiss Corporation purchased Rock Corporation. Rock's functional currency is the FC
Date Relevant Exchange Rates
January 1, 2016 1 FC = $0.25
January 1, 2017 1 FC = $0.30
March 31, 2017 1 FC = $0.40
December 31, 2017 1 FC = $0.50
Weighted average 2017 1 FC = $0.37
Rock Corporation
For the Year Ended December 31, 2017
FC Rate Dollars
Income Statement
Net sales FC 2,000,000
$
Costs and expenses 800,000
Net income FC 1,200,000
$
Statement of Retained Earnings
Retained earnings, beginning of year FC 6,500,000
$1,300,000
Net income 1,200,000
Subtotal FC 7,700,000
$
Dividends (declared on March 31) 1,000,000
Retained earnings, end of year FC 6,700,000
$
Balance Sheet
Assets:
Current assets FC 3,000,000
$
Plant assets (net)
(purchased January 1, 2016) 55,000,000
Total assets FC 58,000,000
$
Liabilities and Stockholders' Equity:
Current liabilities FC 4,000,000
$
Long-term debt 25,000,000
Common stock (issued January 1, 2016) 5,000,000
Paid-in capital in excess of par 17,300,000
Retained earnings 6,700,000
Cumulative translation adjustments
Total liabilities and stockholders' equity FC 58,000,000
$
Rock Corporation
For the Year Ended December 31, 2017
FC Rate Dollars
Income Statement
Net sales FC 2,000,000 .37 $740,000
Costs and expenses 800,000 .37 296,000
Net income FC 1,200,000 .37 $444,000
Statement of Retained Earnings
Retained earnings, beginning of year FC 6,500,000
$1,300,000
Net income 1,200,000
444,000
Subtotal FC 7,700,000
$1,744,000
Dividends (declared on March 31) 1,000,000 .40 $ 400,000
Retained earnings, end of year FC 6,700,000
$1,344,000
Balance Sheet
Assets:
Current assets FC 3,000,000 .50 $ 1,500,000
Plant assets (net)
(purchased January 1, 2016) 55,000,000 .50 27,500,000
Total assets FC 58,000,000
$29,000,000
Liabilities and Stockholders' Equity:
Current liabilities FC 4,000,000 .50 $ 2,000,000
Long-term debt 25,000,000 .50 12,500,000
Common stock (issued January 1, 2016) 5,000,000 .25 1,250,000
Paid-in capital in excess of par 17,300,000 .25 4,325,000
Retained earnings 6,700,000
1,344,000
Cumulative translation adjustments
7,581,000
Total liabilities and stockholders' equity FC 58,000,000
$29,000,000
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