Soft Bound Version for Advanced Accounting 13th Edition
13th Edition
ISBN: 9781260110579
Author: Hoyle
Publisher: McGraw Hill Education
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Textbook Question
Chapter 4, Problem 3DYS
Costco Wholesale Corporation owns and operates membership warehouses in the United States, Canada, United Kingdom, Mexico, Japan, Australia, and Spain. Costco also engages in retail operations through majority owned subsidiaries in Korea and Taiwan. The outside equity interests (not owned by Costco) in the Korean and Taiwanese subsidiaries are presented collectively as noncontrolling interests in Costco’s consolidated financial statements.
Access Costco’s 2015 10-K annual report and answer the following:
- 1. How does Costco present the noncontrolling interest in the following financial statements?
- Consolidated Balance Sheet
- Consolidated Income Statement
- Consolidated Statement of Other Comprehensive Income
- Consolidated Statement of
Cash Flows
- 2. Explain how Costco’s presentations of the noncontrolling interest reflect the acquisition method for consolidated financial reporting as a single economic entity.
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Wahl Company’s 20X5 consolidated financial statements include two wholly owned subsidiaries, Wahl Company of Australia (Wahl A) and Wahl Company of France (Wahl F). Functional currencies are the U.S. dollar for Wahl A and the European euro for Wahl F.
Required
1) What are the objectives of translating a foreign subsidiary’s financial statements?
2) How are gains and losses arising from the translation or remeasurement of each subsidiary’s financial statements measured and reported in Wahl’s consolidated financial statements?
3) What exchange rate is used to incorporate each subsidiary’s equipment cost, accumulated depreciation, and depreciation expense in Wahl’s consolidated financial statements?
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On January 1, 2021, Garcia Co., a U.S. corporation with the U.S. dollar as its functional currency, established Fine Co. as a subsidiary. Fine is located in Special Country, and its functional currency is the LCU. Fine is engaged in the following transactions during 2021:
January 1, 2021
Issued common stock for 500,000 LCU
July 25, 2021
Sold a patent at a gain of 50,000 LCU
October 1, 2021
Paid dividends of 60,000 LCU
Fine Co.’s operating revenues and expenses for 2021 were 900,000 LCU and 700,000 LCU, respectively. The appropriate exchange rates were:
January 1, 2021: 1 LCU = $2.45
July 25, 2021: 1 LCU = $2.15
October 1, 2021: 1 LCU = $2.54
December 31, 2021: 1 LCU = $2.65
Average for 2021: 1 LCU = $2.41
Required:
Calculate the translation adjustment for Fine Co. (Round your answers to the nearest whole dollar.)
Chapter 4 Solutions
Soft Bound Version for Advanced Accounting 13th Edition
Ch. 4 - Prob. 1QCh. 4 - Atwater Company acquires 80 percent of the...Ch. 4 - What is a control premium and how does it affect...Ch. 4 - Prob. 4QCh. 4 - How is the noncontrolling interest in a subsidiary...Ch. 4 - Prob. 6QCh. 4 - Prob. 7QCh. 4 - Prob. 8QCh. 4 - Prob. 9QCh. 4 - Prob. 10Q
Ch. 4 - Prob. 1PCh. 4 - Prob. 2PCh. 4 - Prob. 3PCh. 4 - Prob. 4PCh. 4 - Prob. 5PCh. 4 - Prob. 6PCh. 4 - Prob. 7PCh. 4 - Assuming that Pride, in its internal records,...Ch. 4 - Prob. 9PCh. 4 - Prob. 10PCh. 4 - Prob. 11PCh. 4 - Prob. 12PCh. 4 - Prob. 13PCh. 4 - Prob. 14PCh. 4 - Prob. 15PCh. 4 - Prob. 16PCh. 4 - Prob. 17PCh. 4 - Prob. 18PCh. 4 - Current liabilities: a. 50,000 b. 46,000 c. 40,000...Ch. 4 - Prob. 20PCh. 4 - Stockholders equity: a. 80,000 b. 90,000 c. 95,000...Ch. 4 - Prob. 22PCh. 4 - Prob. 23PCh. 4 - Prob. 24PCh. 4 - Prob. 25PCh. 4 - Prob. 26PCh. 4 - Prob. 27PCh. 4 - Prob. 28PCh. 4 - Prob. 29PCh. 4 - Prob. 30PCh. 4 - Prob. 31PCh. 4 - Prob. 32PCh. 4 - Prob. 33PCh. 4 - Prob. 34PCh. 4 - Prob. 35PCh. 4 - Prob. 36PCh. 4 - Prob. 37PCh. 4 - Prob. 38PCh. 4 - Prob. 39PCh. 4 - Prob. 40PCh. 4 - Prob. 41PCh. 4 - Prob. 42PCh. 4 - Prob. 43PCh. 4 - Prob. 44PCh. 4 - Prob. 1DYSCh. 4 - Prob. 2DYSCh. 4 - Costco Wholesale Corporation owns and operates...
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