Question

On January 1, 20X1, Popular Creek Corporation organized SunTime Company as a subsidiary in Switzerland with an initial investment cost of Swiss francs (SFr) 73,000. SunTime’s December 31, 20X1, trial balance in SFr is as follows:

	Debit				Credit
Cash	SFr	8,700
Accounts Receivable (net)		22,000
Receivable from Popular Creek		5,100
Inventory		27,000
Plant & Equipment		104,000
Accumulated Depreciation					SFr	10,200
Accounts Payable						13,900
Bonds Payable						51,500
Common Stock						73,000
Sales						147,400
Cost of Goods Sold		70,500
Depreciation Expense		10,200
Operating Expense		32,500
Dividends Paid		16,000
Total	SFr	296,000			SFr	296,000

Additional Information

1. The receivable from Popular Creek is denominated in Swiss francs. Its books show a $3,723 payable to SunTime.
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:

	SFr		$
January 1	1	=	0.80
March 1	1	=	0.77
November 1	1	=	0.74
December 31	1	=	0.73
20X1 average	1	=	0.75

6. The U.S. dollar is the functional currency.

Required:
a. Prepare a schedule remeasuring the December 31, 20X1, trial balance from Swiss francs to dollars. (If no adjustment is needed, select 'No entry necessary'.)

	SunTime Company Trial Balance Remeasurement Schedule December 31, 20X1 U.S. Dollars Cash Accounts receivable (net) Receivable from Popular Creek Inventory Plant and equipment Cost of goods sold Depreciation expense Operating expense Dividends paid Total 0 Total debits $0 Accumulated depreciation Accounts payable Bonds payable Common stock Sales Total $0 Total credits $0

Answer 1

a	SunTime Company
	Trial Balance Remeasurement Schedule
	December 31, 20X1
		Swiss Francs	Rate	U.S. Dollars
	Cash	SFr 8,700	0.73	$        6,351
	Accounts receivable (net)	22,000	0.73	16,060
	Receivable from Popular Creek	5,100	0.73	3,723
	Inventory	27,000	0.74	19,980
	Plant and equipment	104,000	0.77	80,080
	Cost of goods sold	70,500	(a)	53,145
	Depreciation expense	10,200	0.77	7,854
	Operating expense	32,500	0.75	24,375
	Dividends paid	16,000	0.74	11,840
	Total	SFr 296,000		$    223,408
	Remeasurement Loss (Bal. Fig)			1,138
	Total debits			$    224,546
	Accumulated depreciation	SFr 10,200	0.77	$        7,854
	Accounts payable	13,900	0.73	10,147
	Bonds payable	51,500	0.73	37,595
	Common stock	73,000	0.80	58,400
	Sales	SFr 147,400	0.75	110,550
	Total			$    224,546
	Total credits			$    224,546
Schedule(a)	Cost of Goods Sold:	Swiss Francs	Rate	U.S. Dollars
	Beginning Inventory	SFr 0	0.80	$             -
	Purchases	97,500	0.75	73,125
	Goods Available for Sale	SFr 97,500		$      73,125
	Less: Ending Inventory	(27,000)	0.74	(19,980)
	Cost of Goods Sold	SFr 70,500		$      53,145