Below you will find the trial balance for Parent Company and its wholly owned purchase, Subsidiary Company, as of December 31, 2012. The financial statements are denominated in British pounds.
Other Important Information:
Subsidiary Company’s assets and liabilities are all shown at fair value except for:
a.The fair value of Inventory is 32,000.
b.The fair value of Depreciable Assets is 370,000.
Subsidiary company sold Parent Company an item that is in Parent Company’s inventory for 10,000 and cost Subsidiary Company 5,000. The sale was made to Parent Company on credit, and no payment has been made.
On December 27, 2012, Parent Company made a long-term loan to Subsidiary Company in the amount of 100,000.
Subsidiary Company paid Parent Company 7,000 for Consulting Services. Subsidiary Company considers this an Administrative Expense, and Parent Company considers it Sales Revenue.
Exchange rates are:
March 31, 2012, Exchange Rate: 1 £ = $1.24 Average Rate for 2012:1 £ = $1.22 December 31, 2012, Exchange Rate:1 £ = $1.20
Company
Parent
Company
Subsidiary
Company
Accounts
Debit
Credit
Debit
Credit
Cash
£10,000
£4,000
Accounts Receivable
25,000
10,000
Inventory
30,000
12,000
Short-Term Investments
40,000
6,000
Prepaid Assets
35,000
12,000
Investment in Subsidiary
290,000
Long-Term Notes Receivable
150,000
14,000
Debt Service Fund
50,000
Depreciable Assets
900,000
350,000
Accumulated Depreciation
£200,000
£50,000
Intangible Assets
45,000
20,000
Current Liabilities
92,000
44,000
Long-Term Notes Payable
225,000
119,000
Common Stock
400,000
200,000
Retained Earnings
482,000
50,000
Sales Revenue
750,000
245,000
Cost of Goods Sold
330,000
160,000
Selling Expenses
100,000
45,000
Administrative Expenses
120,000
70,000
Interest Expenses
24,000
5,000
l submit the initial Excel model for the report that shows the consolidation entries and the final income statement and balance sheet.
translate the consolidated income statement and balance sheet from English pounds to U.S. dollars.
submit the final report as an attractive, polished artifact that includes all the main elements of the final product. The report should reflect the incorporation of feedback gained throughout the course.
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