Final Exam ACC440 Problem 1 On January 1, 20X1, Popular Creek Corporation organized RoadTime Comp

 
   

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Final Exam ACC440 Problem 1 On January 1, 20X1, Popular Creek Corporation organized RoadTime Company as a subsidiary in Switzerland with an initial investment cost of Swiss francs (SFr) 60,000. RoadTime’s December 31, 20X1, trial balance in SFr is as follows: Debit Credit Cash SFr 7,000 Accounts Receivable (net) 20,000 Receivable from Popular Creek 5,000 Inventory 25,000 Plant and Equipment 100,000 Accumulated Depreciation SFr 10,000 Accounts Payable 12,000 Bonds Payable 50,000 Common Stock 60,000 Sales 150,000 Cost of Goods Sold 70,000 Depreciation Expense 10,000 Operating Expense 30,000 Dividends Paid 15,000 Total 282,000 282,000 Additional Information 1. The receivable from Popular Creek is denominated in Swiss francs. Popular Creek’s books show a $4,000 payable to RoadTime. 2. Purchases of inventory goods are made evenly during the year. Items in the ending inventory were purchased November 1. 3. Equipment is depreciated by the straight-line method with a 10-year life and no residual value. A full year’s depreciation is taken in the year of acquisition. The equipment was acquired on March 1. 4. The dividends were declared and paid on November 1. 5. Exchange rates were as follows: January 1 SFr1 = 0.73 March 1 SFr1 = 0.74 November 1 SFr1 = 0.77 December 31 SFr1 = 0.80 20X1 Average SFr1 = 0.75 6. The Swiss franc is the functional currency. Required Prepare a schedule translating the December 31, 20X1, trial balance from Swiss francs to dollars.