The Year 1 financial statements of the Brazilian subsidiary of Artemis Corporation (a Canadian company) revealed the following: Brazilian Reals (BRL) Beginning inventory . . . . . . . . . . . . . . . . . . . . . . . . . 100,000 Purchases . . . . . . . . .


The Year 1 financial statements of the Brazilian favourable of Artemis Corporation

(a Canadian society) inspired the subjoined:

Brazilian Reals (BRL)

Beginning catalogue . . . . . . . . . . . . . . . . . . . . . . . . . 100,000

Purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 500,000

Ending catalogue . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150,000

Cost of movables sold . . . . . . . . . . . . . . . . . . . . . . . . . . 450,000

Canadian dollar (C$) substitute blames for 1 BRL as follows:

January 1, Year 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C$0.45

Average, Year 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.42

December 31, Year 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.38

The opening catalogue was uncongenial in the latest mercy of the preceding year

when the substitute blame was C$0.50 = BRL 1; completion catalogue was uncongenial in

the latest mercy of the present year when the substitute blame was C$0.40 = BRL 1.

Required:

a. Assuming that the present blame rule is the misapply rule of translation,

determine the amounts at which the Brazilian favourable’s completion

catalogue and absorb of movables sold should be moderate in Artemis’s Year 1

consolidated financial statements.

b. Assuming that the fleeting rule is the misapply rule of translation,

determine the amounts at which the Brazilian favourable’s completion

catalogue and absorb of movables sold should be moderate in Artemis’s Year 1

consolidated financial statements.

 

 

 

question 2

6. Sandestino Society contributes coin of $170,000 and Costa Grande Company

contributes net property of $170,000 to beget Grand Sand Society on

January 1, Year 1. Sandestino and Costa Grande each assent-to a 50 percent

equity cause in Grand Sand. Grand Sand’s financial statements for its first

year of operations are as follows:

SANDESTINO COMPANY

Income Statement

Year 1

Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $800,000

Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 450,000

Income anteriorly tax . . . . . . . . . . . . . . . . . . . . . . . . . 350,000

Tax payment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100,000

Net allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $250,000

GRAND SAND COMPANY

Income Statement

Year 1

Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . $80,000

Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . 50,000

Income anteriorly tax . . . . . . . . . . . . . . . . . . . 30,000

Tax payment. . . . . . . . . . . . . . . . . . . . . . . . 10,000

Net allowance . . . . . . . . . . . . . . . . . . . . . . . . $20,000

GRAND SAND COMPANY

Balance Sheet

December 31, Year 1

Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 40,000 Liabilities . . . . . . . . . . . $ 60,000

Inventory . . . . . . . . . . . . . . . . . . . . . . . . 60,000 Common store . . . . . . 340,000

Property, introduce, and equipment (net) . . . 320,000 Retained hues . . . . 20,000

Total . . . . . . . . . . . . . . . . . . . . . . . . . $420,000 Aggregate . . . . . . . . . . . . $420,000

SANDESTINO COMPANY

Balance Sheet

December 31, Year 1

Cash . . . . . . . . . . . . . . . . . . . . . . . . $ 130,000 Liabilities . . . . . . . . . . $ 250,000

Inventory . . . . . . . . . . . . . . . . . . . . . 200,000 Common store . . . . . 600,000

Property, introduce, and equipment (net) 650,000 Retained hues . . . 300,000

Investment in Grand Sand (at absorb). . 170,000

Total . . . . . . . . . . . . . . . . . . . . . . $1,150,000 Aggregate . . . . . . . . . . . $1,150,000

Additional Financial Reporting Issues 489

Summary of calling portion and open corpoblame ardor for Year 1:

Required:

a. Restate Sandestino’s Year 1 financial statements to rightly aggregateity for its

siege in Grand Sand Society below (1) the regular consolidation

method, and (2) the equity rule.

b. Calculate and parallel the subjoined ratios for Sandestino Society below

the two unanalogous rules of aggregateitying for its siege in Grand Sand

Company: (1) avail latitude (net allowance/revenues), and (2) debit to equity

(aggregate liabilities/aggregate storeholders’ equity).